U.S. Home Price Update
The fastest one-month price appreciation in over thirty years (again)
Summary
U.S. home prices rose 2.1% month over month in March, which is the largest single-month change in over thirty years (surpassing the last record of 1.9% set just one month ago)
Tampa and Phoenix lead the way for cities in annual increases at 34.8% and 32.4%, respectively, and Minneapolis saw the least growth with 12.4%
Nominal home prices are high compared to trend but remain below levels seen prior to the 2008 Financial Crisis for some relative metrics (though that gap continues to close each month)
Trend and Change
National home prices, in aggregate, have seen a sharp acceleration above trend since the onset of the pandemic:
While we saw some moderation in the pace of increase a few months ago, it has re-accelerated significantly once again even on a seasonally-adjusted basis:
City-by-city Details
Dallas, Seattle, and Tampa saw big monthly gains in March:
And, many cities grew at rates faster than the national average:
On an annual basis, Phoenix and Tampa have outpaced the pack:
On a five-year basis Las Vegas and Seattle also stand out:
On a ten-year basis, there are some notable laggards including Chicago, New York, Washington, D.C., and Cleveland:
Rates and Supply
Mortgage rates have seen a nearly unprecedented jump in recent months:
Supply of new housing has jumped significantly lately:
Relative Valuation
The price-to-rent ratio continues to rise but is below twenty-year highs:
Price relative to income continues to climb:
And inflation-adjusted home prices are rising quickly even though inflation is running extremely hot:
However, homes relative to the market continue to look reasonable (for now):
The first quarter of the year was pretty shocking for price increases. It will be interesting to see what the rest of 2022 has in store for us.
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