Rates May Be Rising, But Home Prices Still Hit a New Record

 IRVINE, Calif.–Rising rates may be expected to put a damper on the pace of rising home prices, but data through March shows that has yet to be the case.

The reason, according to analysts: demand continues to be stronger than the limited supply of homes for sale.

The newest S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, shows prices rose 20.6% in the year that ended in March, up from a 20% annual rate the prior month. The March numbers marked the highest annual rate of price growth since the index began in 1987.

The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay. Inventory has risen since March but remains below typical levels. The median existing-home price rose 14.8% to $391,200 in April from a year earlier, according to the data from the National Association of Realtors.

“As buyer confidence sags and weighs down demand, real-estate markets will rebalance, eventually tilting away from the heavy advantage that recent home sellers have enjoyed,” Danielle Hale, chief economist for Realtor.com, told the Wall Street Journal.

Case-Shiller reported its 10-city index gained 19.5% over the year ended in March, compared with an 18.7% increase in February. The 20-city index rose 21.2%, after an annual gain of 20.3% in February. Price growth accelerated in 17 of the 20 cities.