Nationwide home prices increased in February after falling for seven consecutive months, according to data released on Tuesday.
New S&P CoreLogic Case-Shiller U.S. National Home Price Index data showed that prices rose from the previous month by 0.2 percent after seasonal adjustment. Prices were up by 2 percent year-over-year.
The 20-City Composite Home Price Index, which measures price growth in major U.S. metro areas, showed a 0.4 percent year-over-year gain. Miami, Tampa and Atlanta posted the highest annual increases.
The bump in home prices reflects a return to normal for the spring buying season, Zillow senior economist Nicole Bachaud said in a statement.
“Inventory has remained low as sellers are locked into their low mortgage rates, even as many homebuyers are turned away from this market due to affordability constraints amid volatile mortgage rates,” she said.
Data released by the Commerce Department last week showed an 0.8 percent decrease in housing starts in March, led by a decline in construction of new multifamily units, which fell by 6.7 percent. Then, after more than a month of declines, mortgage rates climbed to 6.39 percent last week.
“Regardless of slower than usual demand, the low inventory environment is creating more competition on fewer homes, leading to prices reversing their descent from last year’s peak, which will likely continue in the coming months,” Bachaud added.
The latest home price data predates the commercial banking disruptions beginning in March, said Craig J. Lazzara, managing director at S&P DJI, in a statement. Lazzara added that the housing market could face further weakness in the coming months as the Federal Reserve continues to fight inflation.
“Although forecasts are mixed, so far the Federal Reserve seems focused on its inflation-reduction targets, which suggests that interest rates may remain elevated, at least in the near-term,” Lazzara said.
“Mortgage financing and the prospect of economic weakness are therefore likely to remain a headwind for housing prices for at least the next several months,” he added.