Housing prices surge alongside increasing mortgage rates
Uncertainty grows about whether house price increases will continue.
Housing prices have increased by 20.55% since March of last year, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
S&P calculates its price indices monthly using a three-month moving average.
This increase in pricing has happened alongside rising mortgage rates.
Mortgage News Daily's report on the 30-year fixed mortgage rates shows that the average mortgage rate increased from 3.29% in January to 4.78% in March.
Arizona and Florida have seen some of the highest price increases in the nation.
According to Zillow, home values in Phoenix have increased by 34.9% over the past year, with the average price of a home at $398,384.
Tampa's home values have gone up 34.9%, with an average home price of $398,384.
The current rise in real estate prices coincides with an overall increase in prices across the country due to rising inflation.
However, experts say that the Federal Reserve raising interest rates may cause housing prices to fall.
"Mortgages are becoming more expensive as the Federal Reserve has begun to ratchet up interest rates," said Craig Lazzara, managing director at S&P DJI. "Macroeconomic environment may not support extraordinary home price growth for much longer. Although one can safely predict that price gains will begin to decelerate, the timing of the deceleration is a more difficult call."
Until then, sellers can enjoy selling properties for higher prices, while buyers will have to wait until prices come down if they want to find a better deal.
"The rising prices in the real estate market have been absolutely amazing for my sellers," said Katrina Simmons, a realtor in the greater Los Angeles area. "It is definitely a seller's market.
"One thing for sure and two for certain is that current real estate prices will regress," she added. "The smart buyer will sit back and wait and be ready so they may acquire a great deal."
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