Home prices in 20 U.S. cities rose at a faster pace than projected in the year through March, reflecting a limited number of available properties on the market.
The S&P/Case-Shiller index of property values increased 5 percent from March 2014 for a second month, the group said Tuesday in New York. The median estimate of 25 economists surveyed by Bloomberg called for a 4.6 percent year-over-year advance. Nationally, prices rose 4.1 percent from March 2014.
Higher home prices along with lean inventory and limited income growth have tempered the recovery in residential real estate. More construction, particularly of cheaper properties, would help boost supply and bring purchases within reach of more Americans looking to take advantage of low borrowing costs.
“We’ve got an increase in demand at the same time supply has been pretty modest — that’s pushing prices up,” David Berson, chief economist at Nationwide Insurance in Columbus, Ohio, said before the report. “I think house-price gains will moderate, because we’ll start to see more people put houses on the market and more builders building more.”
Economists’ estimates in the Bloomberg survey ranged from gains of 4.3 percent to 5.4 percent. The S&P/Case-Shiller index is based on a three-month average, which means the March figure also was influenced by transactions in February and January.
Home prices in the 20-city index adjusted for seasonal variations increased 1 percent in March from the prior month, in line with the Bloomberg survey median of 0.9 percent.