The S&P/Case-Schiller Index rose 0.2 percent across the country in the first quarter and saw a 10.3 percent jump as compared to the same quarter last year. Housing prices for the top 20 metropolitan areas were up 12.4 percent between March 2013 and March 2014.
"Housing indicators remain mixed. April housing starts recovered the drop in March but virtually all the gain was in apartment construction, not single family homes. New home sales also rebounded from recent weakness but remain soft. Mortgage rates are near a seven month low but recent comments from the Fed point to bank lending standards as a problem. Other comments include arguments that student loan debt is preventing many potential first time buyers from entering the housing market," said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices.
The rise in housing prices, despite being slower than last year's, will most likely not continue this year, suggesting that prices rebounded strongly in 2013.
"A large supply overhang of existing homes promises to keep pressure on prices for some time," wrote Joshua Shapiro, the chief United States economist at M.F.R. Inc., a research firm in New York.
Analysts say that buying in expensive markets is no longer advisable as price gains are not expected for the next few years and buyers will have to pay a substantial premium upfront. In markets such as Boston, Miami and Washington, D.C. prices have risen enough that buying a house is no longer the bargain it was a few years ago.
"Every indicator of housing market activity and prices we know is slowing or falling outright," wrote Ian Shepherdson of Pantheon Macroeconomics in a note to clients. "We think the real trend in existing home prices is now flat at best."