Home-price gains showed no signs of slowing, putting continued pressure on buyers as mortgage rates have also recently risen to their highest levels in years.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 6.5% , identical to the year-over-year increase reported.
The 10-city index gained 6.5% over the year, up slightly from 6.4% the prior month. The 20-city index gained 6.8%, unchanged from the previous month. Economists surveyed by The Wall Street Journal had expected home price growth to decelerate slightly with the 20-city index gaining 6.7%.
The biggest price gains remained concentrated in the West. Seattle saw a 13% annual gain in prices, while Las Vegas prices increased 12.4% and San Francisco saw an 11.3% increase.
David Blitzer, managing director at S&P Dow Jones Indices, attributed the price gains to a lack of homes for sale. Housing inventory is near the lowest level in decades. “Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising,” he said.
Mr. Blitzer noted, however, that the current gains remain more moderate than the last housing bubble, when nationally home price gains peaked at 14.5%—bigger than the current gains in Seattle.
Home-price gains accelerated in 2017 compared with 2016. Nonetheless, economists expected the pace of price growth to slow this year, due to a new tax law that passed in late February that reduced the incentive for homeownership, as well as rising mortgage rates that make owning a home less affordable.
After seasonal adjustment, the national index rose 0.4% month-over-month. The 10-city index rose 0.4% and the 20-city index rose 0.5%. All 20 cities saw price increases in March before seasonal adjustment and 19 out of 20 saw them rise with seasonal adjustment.