Prices for single-family homes in the U.S. rose during March, experiencing their biggest annual gain in close to seven years as more evidence of the strengthening recovery in housing is providing support that the economy is growing.
The index – the Case Shiller/S&P composite index that has 20 U.S. metropolitan areas increased by 1.1% during March based upon a seasonally adjusted basis, which topped the forecasts of economists that a 1% rise would take place.
The prices in the cities in the index jumped more than 10.9% from last year at the same time, which beat the expectations of 10.2% by economists. This increase was the biggest since April of 2006, just prior, to when home prices peaked during the summer of that same year.
The entire index of 20 cities each saw gains for the third consecutive month. Average home prices during March were back at levels of late 2003.
Phoenix home prices made a sharp ascent during March as they went up 22.5% from the same period one year ago. Other markets that saw large increases included San Francisco where prices were up 22.2% and Las Vegas, which was hard hit during the housing collapse, was up 20.6%.
In 2012, the overall housing market was able to turn a corner, several years following its collapse. Since then, the recovery has become stronger with inventory tightening, an easing of foreclosures and mortgage rates at historic lows are attracting buyers.
For the first three months of this year, the national index, which is seasonally adjusted was up 3.9%, stronger than last year’s final quarter increase of 2.4%.