Home Prices Surge 20% in Biggest Jump on Record
June 1, 2022
Rising mortgage rates did little to slow home price growth in March as strong demand met historically low inventory, sending prices higher at the fastest pace on record.
Nationally, home prices were 20.6% higher than they were in March 2021, according to the S&P CoreLogic Case-Shiller Home Price Index, a slight acceleration from February’s 20.0% annual increase. March’s year-over-year price growth is the highest on record since the index began in 1987.
The average rate for a 30-year fixed mortgage stood at 3.29% at the start of January, climbing to 4.67% by the end of March. More expensive borrowing has started to reduce buyer demand in recent months, but prices continue to climb as the inventory of homes on the market remains well below normal levels.
The pace of sales has slowed for several months, and economists widely expect prices to ease by the end of the year. Higher interest rates and waning buyer sentiment will diminish demand, and supply is increasing as more sellers put their homes on the market before it begins to cool.