Home prices rose by more than 20% year-over-year in March, Possible Flattening In April.
US home prices continued to surge higher in March, with Phoenix seeing the most significant price increases.
Prices rose in 17 of 20 cities in March 2022 versus the year ending February 2022.
Although the Federal Reserve increased interest rates and mortgage rates rose, the housing market did not decelerate in March, according to Craig J. Lazzara, managing director at S&P Dow Jones Indices.
Since March, mortgage rates have surged nearly a whole percentage point but have since retreated after the Fed raised rates twice and the economy suffered from inflation and the war in Ukraine.
Recent housing data suggest the market has shifted since March, with more sellers listing homes and mortgage rates near the highest levels in 13 years. Buyer confidence has sagged and is weighing down demand, leading to fewer home sales.
In a market where buyers have to leap each other and waive appraisals, things can’t last like that. Eventually, the pool of ‘overbid’ buyers dries up, and prices will come back to reality.
The Fed is expected to continue raising interest rates to combat rampant inflation. It was the Fed’s loose monetary policy that led to inflation in the first place.
As the money supply diminishes and less lending leads to less economic activity, you will see two things happen in the economy—consumer demand destruction, which we are already seeing via gas and grocery expenses. The second is companies will start laying off employees. Something that has just started to hit the headlines this month. Also indicating that consumer demand for products and services is waning.
For more on this story, please consider these sources:
- Home prices rose by more than 20% year-over-year in March CNN
- Home prices surged over 20% in March as interest rates also rose, according to S&P Case-Shiller CNBC
- U.S. home prices continued to surge in March, but slowdown seems to have started The Seattle Times
- US Home-Price Appreciation Accelerates for Fourth Month Bloomberg
- Home-Price Growth Hit Record in March The Wall Street Journal
- View Full Coverage on Google News