U.S. Home-Price Growth Accelerated in March

Home-price growth climbed in March to the highest level in more than 15 years, as strong demand continued to outweigh the housing supply.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 13.2% in the year that ended in March, up from an 12% annual rate the prior month. March marked the highest annual rate of price growth since December 2005.

Robust homebuying demand, driven by ultralow mortgage interest rates, and a shortage of homes for sale have pushed prices rapidly higher in recent months. There were 1.07 million homes on the market at the end of March, down 28.2% from a year earlier, according to the National Association of Realtors.

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There are early indications that home sales are slowing, but economists expect the supply-demand imbalance to continue driving prices up. Fast-rising home prices and the limited inventory are making homeownership less attainable for first-time buyers or those with limited budgets.

The Case-Shiller 10-city index gained 12.8% over the year ended in March, compared with a 11.7% increase in February. The 20-city index rose 13.3%, after an annual gain of 12% in February. Price growth accelerated in all 20 cities.

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“With demand in high gear and no respite in sight, home-price growth is likely to remain in double digits over the coming quarter,” said Selma Hepp, deputy chief economist for CoreLogic.

Economists surveyed by The Wall Street Journal expected the 20-city index to gain 12.4%.

Phoenix had the fastest home-price growth in the country for the 22nd straight month, at 20%, followed by San Diego at 19.1%.

A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found a 13.9% increase in home prices in March from a year earlier, a record in data going back to 1991.