U.S. home prices rose at a steady pace in March, with Dallas-Fort Worth among the hottest metro areas, according to the latest report from Standard & Poor’s/Case-Shiller.
The group’s 20-city home price index rose 5 percent in March from 12 months earlier, the S&P said Tuesday. Prices increased at the same pace in February.
Prices in Dallas-Fort Worth rose by 9.3 percent, the third-highest year-over-year increase in the country. Only San Francisco and Denver, with gains of 10.3 percent and 10 percent, respectively, were higher.
Home values are rising at a faster rate than incomes, potentially pricing many would-be buyers out of the market. Yet current increases have moderated from the double-digit gains of late 2013 and early last year.
Higher prices have yet to persuade enough owners to list their homes for sale, which could limit purchases during the spring selling season. Would-be buyers have fewer homes to choose from, which has sparked bidding wars in many cities. The median home sold in just 39 days in April, according to the National Association of Realtors, compared with 52 in March.
All 20 cities recorded price gains from the previous year. Cleveland and Washington, D.C., saw the smallest gains, with prices up 1 percent in both.
At the current pace of sales, the supply of homes would last just 5.3 months, below the six months that is typical in a balanced market. The number of homes for sale fell 0.9 percent in April from a year earlier, the Realtors group said last week.
David Blitzer, chairman of S&P’s index committee, said prices are rising at a faster pace than their long-term trend. They also increased more quickly in the past 12 months than average hourly wages, which were up just 2.2 percent.
“It is no surprise that people are asking if we’re in a new home price bubble,” Blitzer said. “I would describe this as a rebound in home prices, not a bubble and not a reason to be fearful.”
Home prices have risen for 34 straight months, according to the Case-Shiller 20-city index, after plummeting during the housing crash and recession. They are still about 15 percent below the peak reached during the housing bubble.