Economist's Insights

Home Prices Continue to Press Higher

May 30, 2017

The March S&P Corelogic Case-Shiller Home Price Index showed home prices continued to press higher as demand remains solid and inventories remain tight. The index tracking home prices in 20 of the largest U.S. metro areas showed prices rose 5.89% in March. A separate index tracking prices more broadly showed prices rose at a slightly slower pace of 5.75% across the country. The YoY increase in March was the fastest for both indices since the summer of 2014. Persistent firming in the U.S. labor market has continued to kindle steady demand while supply remains at historically low levels. Supply of existing homes was just 3.8 months in March, well below the 6 months considered a good balance between supply in demand. The net effect of steady demand and tight supply is that prices continue to show upward momentum.