Home prices in the United States hit an all-time high in March as the country's housing affordability crisis worsens.
National home prices increased by 6.49% nationally in March when compared to last year, according to the S&P CoreLogic Case-Shiller Index. When compared to those in April, home prices climbed 0.3%.
March's year-over-year increase in home prices marked the fastest pace of growth recorded since November 2022. It also marked the sixth time the index has reached a new record high over the past year.
"This month's report boasts another all-time high," Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in the release. "We've witnessed records repeatedly break in both stock and housing markets over the past year."
The 10-city composite posted an 8.2% increase from the year prior. This covers Los Angeles, Miami, and New York. The 20-city composite also saw an annual gain of 7.4%. The 20-year composite tracks home prices in Dallas and Seattle.
Home prices rose in all 20 major metro markets tracked by the index.
Where Home Prices Increased Most
Regionally, home prices in the Northeast reported the most gains, with prices increasing 8.3% over the past year.
By city, the largest price gain took place in San Diego, where home prices soared by 11.1%. New York and Cleveland followed, with price gains of 9.2% and 8.8%, respectively. In contrast, Denver saw the smallest gain in March, with home prices only climbing 2.1% from the prior year.
It is worth noting that the Case-Shiller index reports with a two-month delay. This means it may not capture the latest ongoings in the housing market.
Why Home Prices Are Increasing
There are a number of factors driving up home prices, and worsening housing affordability, in the U.S. First, years of underbuilding have fueled a shortage of homes in the country, especially after the pandemic home buying boom.
This problem was exacerbated by the rapid rise in mortgage rates, which peaked at 8% in October. The average 30-year fixed-rate mortgage has since fallen to 6.94% last week, although it remains higher than anything seen in the decade leading up to the 2022 pandemic. Mortgage rates are expected to hover around the 7% rate until the end of this year.
READ MORE: Mortgage Rates May Stay Above 7% Through 2024, According to Forecasts
