U.S. house price growth slowed significantly in March, likely due to rising mortgage rates dampening demand, according to data released on Tuesday.
The Federal Housing Finance Agency (FHFA) reported that prices edged up by 0.1% in March, following an unrevised 1.2% surge in February. On a year-over-year basis, prices increased by 6.7% in March, down from a 7.1% increase in February.
Existing home sales, which make up the majority of U.S. house sales, fell in March as the average rate on the popular 30-year fixed-rate mortgage approached 7%. Despite this, with housing inventory still below pre-pandemic levels, house prices may remain high for some time. Prices increased by 6.6% between the first quarter of this year and the first three months of 2023, and they were up 1.1% compared to the fourth quarter of the previous year.
“U.S. house prices continued to grow at a steady pace in the first quarter,” said Anju Vajja, deputy director for FHFA’s Division of Research and Statistics. “Over the last six consecutive quarters, the low inventory of homes for sale has continued to contribute to house price appreciation despite mortgage rates hovering around 7%.”
Featured Image: Freepik
