Home Prices Soared to Record High in February

Home prices in the United States soared to a record high again in February despite mortgage rates remaining elevated, according to a report. 

The prices of homes in the U.S. jumped 6.4% year-over-year in February, which followed a 6% rise in the previous month. This marks the fastest rate of price growth since November 2022, per data from the S&P CoreLogic Case-Shiller national home price index published Tuesday.

Additionally, the 10-city composite increased by 8% in February, up from a 7.4% increase recorded the previous month. The 20-city composite also showed a year-over-year increase of 7.3%, up from January's 6.6% jump. 

"Following last year's decline, U.S. home prices are at or near all-time highs. Our National Composite rose by 6.4% in February, the fastest annual rate since November 2022. Our 10- and 20-City Composite indices are currently at all-time highs," Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, said in the report. 

"For the third consecutive month, all cities reported increases in annual prices, with four currently at all-time highs: San Diego, Los Angeles, Washington, D.C., and New York. On a seasonally adjusted basis, our National, 10- and 20- City Composite indices continue to break through previous all-time highs set last year," he added. 

Where Did Home Prices Increase the Most?

Homes in San Diego saw the biggest gain among the 20 cities in the S&P index. Prices of homes in the city increased by 11.4% year-over-year in February. Home prices in Chicago and Detroit also saw annual gains of 8.9%.

"Since the previous peak in prices in 2022, this marks the second time home prices have pushed higher in the face of economic uncertainty. The first decline followed the start of the Federal Reserve's hiking cycle. The second decline followed the peak in average mortgage rates last October," Luke noted. 

In contrast, home prices in Portland, Oregon, saw the smallest gain in the index of just 2.2%. 

The increase in home prices comes as mortgage rates remain elevated. As of the week ending April 25, the average rate for the 30-year fixed mortgage was 7.17% while the rate for the 15-year fixed term was 6.44%, according to Freddie Mac.

READ NEXT: Pending Home Sales in the US Jumped in March Despite 7% Mortgage Rates