U.S. home prices continue to rise in March, home price appreciation likely to pick up gradually

U.S. home prices continue to rise in March, showed FHFA and S&P Corelogic surveys. The 20-city composite from S&P/Case-Shiller CL saw a seasonally adjusted rise of 0.5 percent sequentially and 3.9 percent year-on-year, after a similar rise in February.

The FHFA survey recorded a rise of 0.1 percent sequentially, but this comes at the back of a 0.8 percent rise seen in the prior month and the two month average rise between the two surveys is roughly the same. Moreover, the FHFA index rose 5.9 percent year-on-year, which is an even stronger trend than that reported in the S&P Corelogic survey. In all, the trend in house price appreciation continued to rebound relative to the middle of 2019, when it had slowed considerably.

“We started this year with a constructive view on housing and expected home price appreciation gradually to pick up. However, the spread of COVID-19 and the severe economic disruptions it has caused have already weighed significantly on housing starts and home sales. Prices are reacting with a lag, and in addition leaner inventory levels suggest homeowners are refraining from putting homes on the market. However, we think that price appreciation will eventually slow too”, said Barclays in a research report.