Are Home Price Increases About To Slow Down?

Home prices have spiked over the past year. The most recent S&P Case-Shiller Home Price indices, for example, shows, in the 12 months ending in February, prices rose at the third fastest pace in the 35 years they’ve been tracking them. S&P’s index – which is considered among the leading measures of U.S. home prices – found prices up in every region and at an accelerating pace from the previous month’s report. But while the data could seem discouraging for hopeful spring home shoppers, there may be good news on the horizon. According to Craig J. Lazzara, managing director at S&P, rapidly rising home prices may soon begin to slow. “The macroeconomic environment is evolving rapidly and may not support extraordinary home price growth for much longer,” Lazzara said. “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.” (source)

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