Housing Prices Witness 20% Spike YOY in February
The housing market continues to be a mess...
February opened the eyes of many to the ridiculous surges in U.S. home prices. In February alone, prices rose 19.8% YOY which is higher than the climb of 19.2% experienced in January according to the S&P CoreLogic Case-Shiller United States National Home Price Index.
Unsurprisingly, Phoenix, Tampa, and Miami all reported the highest YOY gains among some 20 cities tracked by the index. February marked the 33rd consecutive month of rising home prices in Phoenix as prices rose 32.9% from last year. Tampa and Miami witnessed a rise of 32.6% and 29.7% respectively. Even as these cities saw the biggest of the jumps, all 20 cities that are tracked reported price increases. The previously monthly report indicated that 16 of the 20 cities witnessed YOY growth.
"US home prices continued to advance at a very rapid pace in February. That level of price growth suggests broad strength in the housing market, which is exactly what we continue to observe."
Craig J. Lazzara, managing director at S&P Dow Jones Indices stated
Craig Lazarra gave a little bit of hope indicating that rising inflation, future interest rate hikes within the Fed, and rising mortgage rates may take the momentum out of the housing market. The imbalance between strong demand from buyers and insufficient supply of homes has been driving prices ridiculously high said George Ratiu, manager of economic research at Realtor.com.
"Today's S&P Case-Shiller Index highlights a housing market experiencing a renewed sense of urgency in February, as buyers worked through a small number of homes for sale in an effort to get ahead of surging mortgage rates."
"For buyers, the jumps in prices and mortgage rates translated into sticker shock.”
George Ratiu said
Inventory has been reported to have increased slightly since February according to the National Association of Realtors. Real estate markets have seen some supply chain disruptions like every other industry since the Russian invasion of Ukraine. Mortgage rates have also been rising fast now sitting above 5%. George concluded by saying a strong labor market is driving wages and inflation higher. He also gave the data on median-priced homes financed with a 30-year-loan that would garner a payment that is $550 higher than a year ago.
With all the negatives being spewed, housing analysts are expecting to see a cool-off in the demand side of things as more inventory is expected to come onto the market this spring paired with rising mortgage rates.