U.S. home prices climbed in March with buyers paying a premium for ownership as the number of properties up for sale declines, and mortgage rates increase.
The S&P CoreLogic Case-Shiller 20-city home price index released Tuesday increased 6.8 percent in March from a year earlier. The sharpest gains were in Seattle, Las Vegas and San Francisco, each of which reported prices rising in excess of 11 percent.
The home price index is slightly higher than the 2006 peak, before the housing market and the economy crashed. The steadily improving economy has helped bring back buyers and higher prices. Home prices are outstripping wage growth easily.
Those soaring prices have been offset by historically low mortgage rates in recent years, but the average 30-year mortgage rate has shot up to a seven-year high of 4.66 percent, according to mortgage buyer Freddie Mac.
That is putting homeownership out of reach for an increasing number of Americans.
Part of the reason that prices are moving higher, according to data from the National Association of Realtors, is the declining number of listings on an annual basis for the past three years. Over the past 12 months, the number of sales listings has dropped 6.3 percent.
Buyers, concerned about being priced out of the market by rising mortgage rates, are aggressively hunting for homes even with listings so sparse.
“Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising,” said David Blitzer, a managing director at S&P Dow Jones Indices.
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