Home prices rose once again in February, picking up the pace from the previous month's gains, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index.
Home prices increased an average 19.8% annually across the U.S. in February, up from January’s 19.1% increase, the index showed. When looking at just the top 10 U.S. cities, the average increase was 18.6%, and among the top 20 cities, the increase was 18.9%.
This year is not expected to provide much relief to homebuyers as prices are expected to continue rising. With both home prices and mortgage rates going up, affordability could continue to drop through 2022.
"The National Composite’s 19.8% year-over-year change for February was the third-highest reading in 35 years of history," S&P Dow Jones Indices Managing Director Craig Lazzara said. "That level of price growth suggests broad strength in the housing market, which is exactly what we continue to observe.
"All 20 cities saw double-digit price increases for the 12 months ended in February, and price growth in all 20 cities accelerated relative to January’s report," Lazzara said. "February’s price increase ranked in the top quartile of historical experience for every city, and in the top decile for 18 of them."
One way that homeowners can take advantage of home value growth is by taking out a cash-out refinance. Visit Credible to get pre-approved in minutes for this type of mortgage loan.
These cities had the highest home price increases
Some cities saw home price increases that were significantly higher than the overall average, the Case-Shiller report showed. For the 33rd consecutive month, Phoenix led the way in price gains with an annual increase of 32.9% in February. This was followed by a 32.6% increase in Tampa and a 29.7% increase in Miami.
On the other hand, Washington D.C. had the lowest annual gain among the top 20 cities at just 11.9% annually. Rounding out the bottom three was Minneapolis at 12% and New York at 12.9%.
On a month-over-month basis, home prices increased 1.7% across all cities. The 10-City and 20-City Composite indexes, which measure the top 10 and 20 U.S. cities, both increased by 2.4%. And overall, all top 20 cities in the U.S. reported home price increases from January to February.
If you are interested in taking advantage of higher home values, you could consider a cash-out refinance to pull money from your home while also possibly lowering your monthly payments. Visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate for you.
Rising interest rates could soon slow home price growth
In order to combat rising inflation, the Federal Reserve is expected to raise interest rates several times in 2022 and 2023. One expert forecasted that these rate hikes could soon slow the growth of home prices.
"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."
If you are interested in taking cash out of your home to pay down debt or cover home improvement projects before interest rates rise further, you could consider a cash-out refinance. Contact Credible to speak to a home loan expert and see if this is the right option for you.
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