Home Prices Kept Climbing At A brisk Pace In March: First American

Housing Wire April 23, 2024

Buyer

Home Prices Kept Climbing At A brisk Pace In March: First American

U.S. home prices grew by 0.9% from February to March, according to First American Data & Analytics’ national house price index released Tuesday. This growth trajectory follows a revised upward figure of 1% price growth from January to February, and prices are now 52% higher than pre-pandemic levels of February 2020.

“Persistent inflation has diminished any optimism that the Federal Reserve may start to cut rates in June, meaning mortgage rates seem more and more likely to remain ‘higher for longer’ this year,” Mark Fleming, chief economist at First American, said in a statement. 

“Many sellers will remain on strike keeping a lid on supply. However, as we saw last fall when mortgage rates peaked, demand may also wane. Even though the supply of homes for sale will remain tight, sagging demand should further slow price appreciation in a ‘higher-for-longer’ mortgage rate environment.”

First American’s analytical lens zooms in at the metropolitan level and segments home prices across three distinct tiers: starter, mid-tier and luxury. The starter tier includes home sale prices in the bottom one-third of the market price distribution. The mid-tier represents prices in the middle third of the market, while the luxury tier represents prices in the top third of the market.

“Starter home price appreciation will continue to face upward pressure in a ‘higher-for-longer’ market,” Fleming said. “Starter homes are the least supplied because it is the market segment most supplied by existing homeowners, who are the most vulnerable to the rate lock-in effect and thus unable or unwilling to list their home for sale to fuel a move-up purchase.”

Fleming noted that starter-tier prices are increasing on a yearly basis by more than 10% in metros like Nassau County, New York; Pittsburgh; Miami; and New York City.

Meanwhile, the metros of Anaheim, California; Miami; San Diego; Pittsburgh; and Cambridge, Massachusetts posted the highest yearly growth in prices, with double-digit growth for many of them.

Looking only at the starter-home segment, the highest year-over-year price increases were observed in Nassau County; New Jersey; PIttsburgh; Miami; New York; and Charlotte.


We are Your GPS to Success Let’s Get Started

We Guide Homeowners through the complicated process of selling their home using our 4 Phase Selling Process and 3 Prong Marketing Strategy that alleviates their stress and moves them effortlessly to their next destination. Schedule a 15 Minute Complimentary Strategy Session Today

Follow Us On Instagram