US Home Prices Surge for 13th Consecutive Month, Up 0.61% in February
Home prices in the top 20 cities of America kept climbing for the 13th consecutive month in February, as per the latest report from S&P Global Case-Shiller. The increase was substantial at 0.61% compared to the previous month, significantly exceeding the expected 0.1% rise. This surge pushed the year-over-year (YoY) price up by an impressive 7.29%, surpassing the anticipated 6.70% increase. This marks the swiftest price escalation since October 2022.
Brian D. Luke, the Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, noted that this is the second instance since the peak in prices in 2022 where home prices have surged despite economic uncertainty. The National Composite saw a notable rise of 6.4% in February, the highest annual rate since November 2022.
San Diego reclaimed its position at the top, with home prices surging by double digits.
Despite the Case-Shiller data's smoothing effect and substantial delay, establishing a direct cause-and-effect relationship between prices and mortgage rates is challenging. However, with rates persisting above 7%, it seems improbable that prices can sustain their upward trajectory.
Nevertheless, home prices continue to exhibit a strong correlation with Federal Reserve policies. Additionally, median new home prices remain disconnected, with Case-Shiller's data nearing record highs.
The question arises: How will Powell consider cutting rates when home prices are experiencing such rapid annual growth?