There's more bad news for potential homebuyers: Prices just hit another record
US home prices rose at the fastest clip in months to a fresh record high in January, highlighting how a housing shortage combined with high mortgage rates continues to limit affordability. The S&P CoreLogic Case-Shiller US National Home Price index rose 6% in January from a year before, accelerating from a 5.6% annual increase in December. Housing prices have shot to new heights amid decades of underbuilding and rising costs. Efforts to boost inventory were hampered by sharply rising interest rates. The 30-year fixed-rate mortgage averaged 6.87% in the week ending March 21. Mortgage rates are expected to drop further this year. A separate report showed that it’s more affordable to rent than to buy in America’s biggest cities. In February, the cost of buying a starter home in those cities was $1,027 more than renting one. Cities facing the biggest housing shortages are also seeing some of the highest home price gains. However, decades-high interest rates and borrowing costs weighed on some price growth. On a month-over-month basis, prices rose 0.4%. The S&P CoreLogic’s 20-City Composite index inched up by 0.1%. When stripping out seasonal adjustments, 17 of the 20 metro areas recorded price declines from December to January.