While a series of macroeconomic factors impede affordability, the persisting imbalance of supply and demand helped single-family home prices maintain their upward trajectory in February 2022, according to the most recent S&P CoreLogic/Case-Shiller Indices.
The index showed that home prices appreciated 19.8% during the month, up from 19.1% in January. All 20 cities saw annual price growth as the 10- and 20-City Composites rose 18.6% and 20.2%, respectively.
Markets in the Sun Belt saw the largest year-over-year price growth during the period, as Phoenix led the way with a 32.9% increase. Tampa and Miami followed closely behind with prices jumping by 32.6% and 29.7%, respectively.
While February marked another month of double-digit growth in home prices, experts are skeptical about how much longer this growth could continue in an inflationary environment, along with rising mortgage rates and other macroeconomic impacts.
The complete data for the 20 markets measured by S&P:
Atlanta, Georgia
February/January: 2.0%
Year-Over-Year: 24.0%
Boston, Massachusetts
February/January: 2.1%
Year-Over-Year: 14.6%
Charlotte, North Carolina
February/January: 1.9%
Year-Over-Year: 25.5%
Chicago, Illinois
February/January: 1.2%
Year-Over-Year: 13.1%
Cleveland, Ohio
February/January: 0.9%
Year-Over-Year: 13.6%
Dallas, Texas
February/January: 2.9%
Year-Over-Year: 28.8%
Denver, Colorado
February/January: 3.1%
Year-Over-Year: 22.3%
Detroit, Michigan
February/January: 1.6%
Year-Over-Year: 14.6%
Las Vegas, Nevada
February/January: 2.1%
Year-Over-Year: 27.5%
Los Angeles, California
February/January: 3.2%
Year-Over-Year: 22.1%
Miami, Florida
February/January: 2.3%
Year-Over-Year: 29.7%
Minneapolis, Minnesota
February/January: 1.1%
Year-Over-Year: 12.0%
New York, New York
February/January: 1.1%
Year-Over-Year: 12.9%
Phoenix, Arizona
February/January: 2.2%
Year-Over-Year: 32.9%
Portland, Oregon
February/January: 2.5%
Year-Over-Year: 19.0%
San Diego, California
February/January: 4.5%
Year-Over-Year: 29.1%
San Francisco, California
February/January: 3.7%
Year-Over-Year: 22.9%
Seattle, Washington
February/January: 4.4%
Year-Over-Year: 26.6%
Tampa, Florida
February/January: 2.7%
Year-Over-Year: 33.6%
Washington, D.C.
February/January: 1.7%
Year-Over-Year: 11.9%
The takeaway:
“The macroeconomic environment is evolving rapidly and may not support extraordinary home price growth for much longer,” said Craig J. Lazzara, managing director at S&P DJI. “The post-COVID resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices.”
“Today’s S&P Case Shiller Index highlights a housing market experiencing a renewed sense of urgency in February, as buyers worked through a small number of homes for sale in an effort to get ahead of surging mortgage rates,” said George Ratiu, manager of economic research for realtor.com®. “The imbalance between strong demand and insufficient supply pushed prices 19.8% higher compared with a year ago.”
He added, “Real estate markets experienced a rush of changes over the past two months, stemming from a strong labor market driving wages and inflation higher, tight inventory, supply-chain disruptions from the war in Ukraine, and interest rates rising to 11-year highs. For buyers, the jumps in prices and mortgage rates translated into sticker shock. For a median-priced home financed with a 30-year loan, the monthly payment is $550 higher than a year ago, a 46% jump which dwarfs the 15% increase in housing prices and 8.5% advance in consumer prices. For sellers, rising prices offer a welcome environment for cashing out equity. However, since most sellers are also buyers, they are facing a similar conundrum, as their next homes also carry higher price tags and interest rates. As we move through the spring housing market, we are seeing clear signs of cooling demand. Many buyers are deciding to take a step back and re-evaluate their budgets and timelines. The silver lining to the moderation in transactions is that markets seem to be stepping back from the overheated environment of the past year.”
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news to jgrice@rismedia.com.
