The upward trajectory of home prices continued in February with the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index climbing at an annual rate of 5.8%, beating expectations by 0.1 percentage points and representing the highest gains in 32 months, CNCB reported.
One of the biggest drivers of price growth is low housing stock, which sits at a 3.8-month supply, and steady demand.
Seattle, Portland, OR, and Dallas saw the biggest year-over-year price jumps at 12.2%, 9.7% and 8.8%, respectively. Seattle, Portland and Denver led major U.S. cities in price growth in January.
Constrained inventory continues to drive up housing prices, and the spring season is fueling even more frenzied buying. According to a separate CNBC report, homes sold in March were available an average of 34 days, a quicker turnaround than February (45 days) and March 2016 (47 days).
Existing-home sales turned in their fastest pace in more than a decade in March while inventory levels continued to decline. Meanwhile, March new-home sales beat analyst estimates in the category’s strongest month since July. “Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable to lower mortgage rates,” David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones, said in a statement.
The rapid pace of home-price increases is concerning some industry analysts, The Real Deal noted, as price growth is outpacing income gains. While February home prices were up almost 6% from January, income only rose 3% for the period. Still, economists said a crash is not likely, though the markets may contract.
In a recent Gallup poll, 61% of U.S. adults think housing prices will continue to increase over the next 12 months, up from 55% who said the same in 2016.
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