Home price growth continued to pop in February. Annual home price gains were up 19.8% in February, up from a 19.1% year over year increase in January, according to the latest S&P CoreLogic Case-Shiller National Home Price Index report released on Tuesday.
Month over month, the U.S. National Index saw a 1.7% increase in home prices. In December, the index began to rise again after four consecutive months of declines.
“U.S. home prices continued to advance at a very rapid pace in February,” Craig Lazzara, the managing director at S&P DJI, said in a statement. “The National Composite’s 19.8% year-over-year change for February was the third-highest reading in 35 years of history. That level of price growth suggests broad strength in the housing market, which is exactly what we continue to observe.”
The Case-Shiller 20-city home price index posted a 20.2% year-over-year increase, up from 18.9% a month prior. All 20 cities analyzed reported higher price increases in the year ending in February 2022 compared with the year ending January 2022, as well as month-over-month price increases.
The 10-city home price index also rose in February, increase from 17.3% year-over-year growth in January to a 18.6% increase in February.
“All 20 cities saw double-digit price increases for the 12 months ended in February, and price growth in all 20 cities accelerated relative to January’s report,” Lazzara said in a statement.” February’s price increase ranked in the top quartile of historical experience for every city, and in the top decile for 18 of them.”
Yet again, Phoenix, Tampa and Miami reported the highest year-over-year home price increases among the 20 cities analyzed, with annual increases of 32.9%, 32.6% and 29.7%, respectively.
Experts attribute these rapid home price increases in February on low inventory and high demand from buyers hoping to get into a home before mortgage rates increased. Mortgage rates have since surpassed the 5% mark, their highest level in the past 10 years.
“This enormous demand came from first-time homebuyers, especially those looking to buy and lock in their mortgages before rates go up further,” Steve Reich, the COO of Finance of America Mortgage, said in a statement. “At the same time, the housing supply is still at record lows—and those two factors continue to push prices higher. While reports of additional inventory coming down the pike and more potential rate hikes from the Fed might put a damper on home prices long-term, I believe that a fear of missing out on low rates is contributing to the home-price growth we’ve seen in January and February.”