America’s Most Splendid Housing Bubbles, March Update: Right Before the Big Mortgage Rate Surge

Mad mania to lock in mortgage rates when they were still at 3.2%. But now they are close to 5%.

By Wolf Richter for WOLF STREET.

So now we have a new look at incredibly high home prices, up more than 30% year-over-year in Phoenix and Tampa, according to the S&P CoreLogic Case-Shiller Home Price Index today. But those prices predate the big spike in US mortgage rates.

How long are we talking about?

The ‘January’ home price data released today is a three-month moving average of closed sales that were registered in public registers in November, December and January, reflecting transactions and mortgages completed approximately between October and December, when the average 30-year fixed mortgage rate was around 3.2%. The average 30-year fixed mortgage rate is now hovering around 5%, according to Daily Mortgage Newsand current house price data is still unaffected by this surge in mortgage rates:

There was a mad scramble to close deals late last year and earlier this year before mortgage rates rose, and that mad scramble is reflected here.

The overall national Case-Shiller home price index for “January” jumped 1.1% from December and 19.2% year-over-year. The Case-Shiller house price indices were set at 100 for January 2000. This means that the overall index, with an index value of 282 for “January”, has jumped 182% since January 2000, more four times the CPI rate. inflation.

Los Angeles Subway: Single-family home prices jumped 1.6% in January from December and 19.9% ​​year-on-year. The index value of 385 means home prices have soared 285% since January 2000, crowning Metro Los Angeles as the most splendid number 1 real estate bubble on this list.

San Diego Metro: Single-family home prices rose 2.5% for the month and 27.1% year-over-year. Since 2000, house prices have skyrocketed by 284%:

It’s house price inflation.

The Case-Shiller index is based on the “sales pair” method, comparing the sale price of a home when it sells in the current period to the price of same house when it sold out before. The index includes adjustments for home improvements and the passage of time between sales. By calculating how many dollars it takes to buy the same house over time, the index measures house price inflation.

Seattle Metro: The Case-Shiller index climbed 2.0% for the month and 24.7% year-on-year. Since January 2000, housing price inflation in Metro Seattle has soared to 265%:

San Francisco Bay Area: House prices increased 2.4% for the month and 20.9% year over year:

San Francisco Bay Area: Condominium prices edged up 0.1% for the month, after declining for four straight months. Since July of last year, prices have remained roughly stable. Year over year, the index rose 8.3%. Since June 2018, condo prices have only increased by 4.0%:

Miami Metro: Home prices climbed 1.8% for the month and 28.1% year-over-year, the fastest since February 2006, on the eve of its epic Housing Bust:

Tampa Metro: Home prices soared 2.3% for the month and 30.8% year-over-year, a record high for metro Tampa, surpassing even wild peaks on the eve of the housing crisis :

Phoenix Metro: Home prices climbed 1.7% for the month and a record 32.6% year-over-year, outpacing the frenzy just before the housing crisis. Year-over-year price spikes were over 30% from last July:

Portland Metro: The Case-Shiller index rose 0.9% for the month and 17.7% year-on-year:

Boston Subway: +0.7% over the month and +13.3% over one year:

Washington DC Metro: +1.1% over the month and +11.2% over one year:

Denver Metro: +1.6% over the month and +20.8% over one year:

Las Vegas Metro: +1.7% over the month and +26.2% over one year:

Dallas Metro: +1.9% for the month, and a record +27.3% year over year:

New York subway: +0.9% over the month and +13.5% over one year. With an index value of 258, the Metro has experienced house price inflation of 158% since 2000.

The remaining metros in the 20-metro Case-Shiller Index – Atlanta, Charlotte, Chicago, Cleveland, Detroit and Minneapolis – have house price inflation since 2000 of less than 150%, and although some of their price increases are still huge, they do not qualify for this illustrious list of the most beautiful real estate bubbles.

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