According to S&P Case-Shiller, home values increased even more in February despite rising mortgage rates.

San Diego saw the most price increase of the 20 American cities included in the index, up 11.4% from February 2023.

TFD – Explore the impact of rising mortgage rates amidst inflation concerns and their effects on home prices. Stay updated with the latest trends shaping the housing market.

Home values are still rising due to strong demand and limited availability, even if mortgage rates are currently rising once more.

February’s annual increase in home prices was 6.4%, building on the 6% increase from the previous month, according to the S&P CoreLogic Case-Shiller national home price index, which was issued on Tuesday. Since November 2022, this was the quickest pace of price increase.

The 10-city composite increased by 8%, following a 7.4% increase the month before. An annual gain of 7.3% was observed in the 20-city composite, which had advanced 6.6% in January.

“After last year’s decline, U.S. home prices are at or near all-time highs,” stated Brian Luke, S&P Dow Jones Indices’ head of commodities, real, and digital assets. “All cities reported increases in annual prices for the third consecutive month, with four of them currently at all-time highs: New York, Los Angeles, San Diego, and Washington, D.C.”

Out of the 20 cities in the ranking, San Diego recorded the most increase in prices, at 11.4% from February 2023. Detroit and Chicago both announced 8.9% yearly growth. With an increase of only 2.2%, Portland, Oregon, had the least index growth.

“For the past six months, the Northeast, which comprises Washington, D.C., New York, and Boston, has been the best performing market. Returning to the office may be a factor in the Northeast’s larger metropolitan centers outperforming remote work, as it did for smaller (and sunnier) markets in the early half of the decade, says Luke.

This is the second time that home prices have increased despite economic uncertainties since the previous market peak in 2022. The Federal Reserve’s cycle of rate hikes was preceded by the first drop. The October peak of average mortgage rates was followed by the second decrease, he continued.

This index goes back to December, when mortgage rates reached their most recent lows, and it tracks prices using a three-month moving average. The Federal Reserve was also widely expected to cut interest rates at the time. It might have encouraged purchasers to act quickly.

However, mortgage rates have increased by over a full percentage point since then. Additionally, expectations that the Fed will dramatically reduce rates this year have decreased due to continuing and stubborn inflation.