Housing price rise sharpest since ’ 14

Rate outpacing growth of wages

WASHINGTON — U. S. home prices climbed in March at the strongest rate in nearly three years as a dwindling supply of houses for sale is causing prices to outpace income growth.

The Standard & Poor’s CoreLogic Case- Shiller 20- city home price index released Tuesday rose 5.9 percent over the past 12 months that ended in March, the most since July 2014. Home values are increasing at more than double the pace of average hourly earnings, making it more difficult for many people to afford to buy a home.

“Over the last year, analysts suggested that one factor pushing prices higher was the unusually low inventory of homes for sale,” said David Blitzer, managing director and chairman of the index committee at S& P Dow Jones Indices. “People are staying in their homes longer rather than selling and trading up.

A steady job market has bulked up demand among many would- be buyers, but there are fewer properties on the market. Sales listings have plummeted 9 percent over the past year to 1.93 million, according to the National Association of Realtors. The shortage of homes to buy has caused prices to rise

sharply in many metro areas.

The largest annual gain was in Seattle, where prices have surged 12.3 percent. Portland, Ore., recorded a 9.2 percent increase, while Dallas prices rose 8.6 percent.

Home prices fell in Cleveland and Tampa, Fla., from the previous month.

“While there is some regional variation, prices are rising across the U. S.,” Blitzer said. “There is no way to tell when rising prices and mortgage rates will force a slowdown in housing.”

Of the 20 cities in the index, the weakest gain was in New York City, where home

prices are already high relative to median incomes. Home prices in New York City have risen 4.1 percent in the past year, still much higher than U. S. average hourly earnings that have increased 2.5 percent over the past 12 months, according to the Bureau of Labor Statistics.

Long- term U. S. mortgage rates fell last week to their lowest levels of the year. The benchmark 30- year rate dipped below the key 4 percent mark.

Mortgage buyer Freddie Mac, the Federal Home Loan Mortgage Corp., said Thursday that the average rate on 30- year fixed- rate home loans tumbled to 3.95 percent from 4.02 percent last week. The rate stood at 3.64 percent a

year ago and averaged 3.65 percent in 2016, the lowest level in records dating to 1971.

The rate on 15- year mortgages slipped to 3.19 percent from 3.27 percent last week.

Information for this article was contributed by Shobhana Chandra of Bloomberg News.