In March, home prices rose 4.4 percent annually, according to the recent S&P CoreLogic/Case-Shiller Indices—up from the previous month’s 4.2 percent.
The complete data for the 20 markets measured by the S&P:
Las Vegas, Nev.
Los Angeles, Calif.
New York, N.Y.
San Diego, Calif.
San Francisco, Calif.
“March’s data witnessed the first impact of the COVID-19 pandemic on the S&P CoreLogic Case-Shiller Indices,” says Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “We have data from only 19 cities this month, since transactions records for Wayne County, Mich. (in the Detroit metropolitan area) were unavailable. That said, housing prices continue to be remarkably stable. The National Composite Index rose by 4.4 percent in March 2020, with comparable growth in the 10- and 20-City Composites (up 3.4 percent and 3.9 percent, respectively). In all three cases, March’s year-over-year gains were ahead of February’s, continuing a trend of gently accelerating home prices that began last autumn. March results were broad-based. Prices rose in each of the 19 cities for which we have reported data, and price increases accelerated in 17 cities.”
And at the regional level, price gains ranked the highest in Phoenix and Seattle.
“Phoenix retains the top spot for the tenth consecutive month, with a gain of 8.2 percent for March. Home prices in Seattle rose by 6.9 percent, followed by increases in Charlotte (5.8 percent) and Tampa (5.7 percent),” said Lazzara. “Prices were particularly strong in the West and Southeast, and comparatively weak in the Midwest and Northeast.”
According to Lazzara, the coronavirus did not have a negative impact on home prices in March.
“Importantly, today’s report covers real estate transactions closed during the month of March. Housing prices have not yet registered any adverse effects from the governmental suppression of economic activity in response to the COVID-19 pandemic. As much of the U.S. economy remained shuttered in April, next month’s data may show a more noticeable impact.”
In fact, the pandemic is driving prices up due to an increase in inventory shortages, according to Quicken Loans Executive Vice President of Capital Markets Bill Banfield.
“The current coronavirus pandemic is only exacerbating the already low housing inventory, causing home prices to trend up. While prices plummeted during previous periods of financial distress, currently, purchase demand is strong, keeping them steadily rising. Unless there is a major shift in the amount of people looking to buy a house, it seems owners will continue to see their home’s value increase every month.”
“The strength in the home price growth is a testament to pent up demand among millennials who are viewing historically low mortgage rates and lull in the market activity as a unique opportunity to purchase their first home,” said Selma Hepp, deputy chief economist for CoreLogic. “And while the pandemic has introduced a lot of uncertainty about the economic outlook, the strong demand leading up the pandemic suggests there are many buyers who are still looking to buy a home but are waiting out for the economy to open up. Certainly, recent data suggests home buying activity picking up, which amid low for-sale inventory levels will continue to prop up home prices.”
The Federal Housing Finance Agency (FHFA) House Price Index (HPI) was released today as well, reporting house prices increased 5.7 percent YoY in the first quarter of 2020. The seasonally adjusted monthly index for March was up 0.1 percent from February.
“Home price growth in the first quarter outpaced annual growth from the same period a year ago as falling interest rates and shrinking inventories for sale led prices higher just prior to the crisis. Prices in the Mountain Division, encompassing the top four states by growth, grew by 8 percent on a year over year basis,” said Dr. Lynn Fisher, deputy director of the division of research and statistics at FHFA. “Because of the lag between contract signing and sale closing when our data are recorded, we judge the first quarter’s housing statistics were relatively unaffected by the COVID-19 outbreak. However, we are unable to account for any modifications or cancellations of sales later in March.”