1 of 2 | Home prices continue to march higher, though broader gains could be limited by ongoing concerns about the health of the U.S. economy. File photo by Alexis C. Glenn/UPI. | License Photo
May 30 (UPI) -- U.S. home prices increased month-on-month in March and are close to peaks seen last summer, though concerns about the health of the economy could put a ceiling on any further gains, the S&P CoreLogic Case-Schiller indices showed.
S&P data through March show Miami, Tampa and Charlotte, N.C., had the largest year-on-year price increases among 20 major metropolitan areas. Miami, where S&P put the mid-tier price range at between $441,000 and $640,000, saw home prices increase 7.7% over year-ago levels. At the low end for the top three, Charlotte, which leapfrogged Atlanta, recorded a 4.7% increase from March 2022 levels.
Including a seasonal adjustment factor, S&P showed a month-on-month increase of 0.4%, while its 20-city composite index increased by 0.5% from February levels. Craig Lazzara, the managing director for the indices, said data showed a modest trend in home prices.
Prices now are about 3.6% below peak levels from June, when home prices were 18% higher than the same period in 2021.
"Two months of increasing prices do not a definitive recovery make, but March's results suggest that the decline in home prices that began in June 2022 may have come to an end," Lazzara said. "That said, the challenges posed by current mortgage rates and the continuing possibility of economic weakness are likely to remain a headwind for housing prices for at least the next several months."
President Joe Biden and House Speaker Kevin McCarthy reached an agreement on resolving an impasse over the debt ceiling, though broader markets were mixed on Tuesday as traders vetted the potential "yays" and "nays" in a divided Congress.
The U.S. consumer, meanwhile, is growing pessimistic given that inflation continues to run above the 2% target rate set by the Federal Reserve. Lingering inflationary pressures could incentivize another rate hike from the Fed, leaving consumers -- and would-be homeowners -- with higher lending rates.
Bankrate.com put the national average rate on a 30-year, fixed-term mortgage at 7.2% on Tuesday, compared with a rate closer to 3% in 2021.