Home prices in February rose at the fastest clip since November 2022, according to national home price data released Tuesday.
Prices nationwide rose 6.4% over the same month last year, the S&P CoreLogic Case-Shiller Home Price Index showed.
“Following last year’s decline, U.S. home prices are at or near all-time highs,” Brian Luke, head of commodities, real & digital assets at S&P Dow Jones Indices, wrote in a press release.
“Our 10- and 20-City Composite indices are currently at all-time highs.”
A gauge measuring price changes in 20 of the nation’s largest cities increased 7.3%, up from a 6.6% increase in the previous month. Data from Bloomberg showed that analysts had expected this reading to show prices rose by 6.7% over the prior year.
Prices rose 0.6% nationally compared to the prior month, the first monthly increase since last October. On a seasonally adjusted basis, prices rose 0.4% in February.
“Since the previous peak in prices in 2022, this marks the second time home prices have pushed higher in the face of economic uncertainty,” Luke added.
“The first decline followed the start of the Federal Reserve’s hiking cycle. The second decline followed the peak in average mortgage rates last October. Enthusiasm for potential Fed cuts and lower mortgage rates appears to have supported buyer behavior, driving the 10-and 20- City Composites to new highs.”
On a monthly basis, Seattle, San Diego, and San Francisco saw the largest jumps in home prices. Over the prior year, San Diego, Detroit, and Chicago saw the biggest price increases.
“The substantial shortage of existing homes for sale fueled a robust 0.4% [month-over-month] rise in house prices in February, consistent with our above-consensus call that house price growth will end 2024 at 5% [year-over-year],” wrote Thomas Ryan, property economist at Capital Economics, in a note to clients on Tuesday.
“Looking ahead, while still high mortgage rates will prevent a house price boom, we think the combination of tight supply and rising buyer demand will deliver a few more years of solid house price growth.”