Home Prices Are Still Climbing—Just Not Quite So Fast, Estimates Suggest

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February’s home-price data won’t reflect the impact of rising mortgage rates.

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Home prices are expected to have kept climbing double-digits in February, forecasts suggest.

Case Shiller’s report on home prices is scheduled to be released Tuesday morning. Consensus estimates gathered by FactSet forecast home prices in February to have jumped 19% annually for Case Shiller’s 20-city index. That represents a slight deceleration from the 19.1% gain reported in January.

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The popular gauge of home prices has reflected significant year-over-year gains since the early days of the pandemic. Home prices nationally in January, the latest month of data available, grew at the fourth-fastest rate in the 35-year history of the index, according to Case Shiller.

The February data is likely the last read on the housing market before the impact of swiftly rising mortgage rates. The average rate on a 30-year fixed loan since the start of March has risen 1.35 percentage points to 5.11%, according to Freddie Mac data. That represents the bulk of this year’s 2 percentage point gain, which brought rates from 3.11% at the end of December to above 5% for the first time in more than a decade.

Such a rise in rates, on top of swift gains in home prices amid a limited supply of homes for sale, has pushed some prospective buyers to the sidelines.

Rising rates’ full impact on the spring housing market has yet to be seen. Existing-home sales dipped in March, the National Association of Realtors reported last month, while the median home’s sale price was 15% higher than the year prior.

A second look at home sales is expected later Tuesday. The Census Bureau and Department of Housing and Urban Development are set to release new-home sales data for the month of March. New homes are projected to have sold at a seasonally adjusted annual rate of 764,500, down from 772,000 in February, according to FactSet.

Write to Shaina Mishkin at [email protected]

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Credit: www.marketwatch.com /

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