Dive Brief:

• The upward trajectory of home prices continued in February with the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index climbing at an annual rate of 5.8%, beating expectations by 0.1 percentage points and representing the highest gains in 32 months, CNCB reported. 

• One of the biggest drivers of price growth is low housing stock, which sits at a 3.8-month supply, and steady demand. 

• Seattle, Portland, OR, and Dallas saw the biggest year-over-year price jumps at 12.2%, 9.7% and 8.8%, respectively. Seattle, Portland and Denver led major U.S. cities in price growth in January.

Dive Insight:

Constrained inventory continues to drive up housing prices, and the spring season is fueling even more frenzied buying. According to a separate CNBC report, homes sold in March were available an average of 34 days, a quicker turnaround than February (45 days) and March 2016 (47 days).

Existing-home sales turned in their fastest pace in more than a decade in March while inventory levels continued to decline. Meanwhile, March new-home sales beat analyst estimates in the category’s strongest month since July. “Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable to lower mortgage rates,” David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones, said in a statement.

The rapid pace of home-price increases is concerning some industry analysts, The Real Deal noted, as price growth is outpacing income gains. While February home prices were up almost 6% from January, income only rose 3% for the period. Still, economists said a crash is not likely, though the markets may contract.

In a recent Gallup poll, 61% of U.S. adults think housing prices will continue to increase over the next 12 months, up from 55% who said the same in 2016.

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