U.S. home prices continued their upward march in February, rising 0.4% compared with January and up 6.4% compared with February 2023, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
The index’s 20-city and the 10-city composites both reported month-over-month increases of 0.6%.
Year-over-year, the 10-city composite showed an increase of 8.0%, while the 20-city composite posted an increase of 7.3%.
San Diego saw the highest year-over-year gain among the 20 cities with an 11.4% increase, followed by Chicago and Detroit, with increases of 8.9%.
Portland, while still holding the lowest rank after reporting two consecutive months of the smallest year-over-year growth, had a significant annual increase of 2.2% in February.
“Following last year’s decline, U.S. home prices are at or near all-time highs,” says Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, in a statement. “Our national composite rose by 6.4 percent in February, the fastest annual rate since November 2022. Our 10- and 20-city composite indices are currently at all-time highs. For the third consecutive month, all cities reported increases in annual prices, with four currently at all-time highs: San Diego, Los Angeles, Washington, D.C., and New York. On a seasonal adjusted basis, our National, 10- and 20- city composite indices continue to break through previous all-time highs set last year.
“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 says. “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.
“The Northeast region, which includes Boston, New York, and Washington, D.C., ranks as the best performing market for over the last half year,” Luke explains. “As remote work benefitted smaller (and sunnier markets) in the first part of the decade, return to office may be contributing to outperformance in larger metropolitan markets in the Northeast.
“As with many economic indicators, the road to normalizing housing markets remains windy,” says Selma Hepp, chief economist for CoreLogic, in a separate statement. “While home sales and inventories are improving over last year’s bottom, higher mortgage rates continue to challenge affordability and keep many potential buyers on the sidelines. Still, given the persistent imbalance between buyers and sellers, home price growth remains solid and monthly gains march higher despite slowing of annual acceleration which simply reflects comparison with particularly strong gains in spring of 2023.”
Photo: Max Harlynking
