Home prices increased 19.8% in February year over year, according to the S&P CoreLogic Case-Shiller national home price index. It is a significant increase from the January 19.1% annual growth and it is also the third-highest reading of the 35-year-old index.

10.6 percent was the composite annual increase for 10-cities, up 17.3% from the previous month. In comparison to 18.9%, 20-city composite saw a 20.2% increase.

Sun Belt cities saw the greatest gains. Annual home price increases of 32.9%, 32.6%, and 29.7% were recorded in Phoenix, Florida and Miami, respectively. In the past year, all 20 cities saw higher prices than in January 2022.

New York, Minneapolis, and Washington, D.C. saw the lowest price increases, but they still remained in double digits.

“The macroeconomic environment is evolving rapidly and may not support extraordinary home price growth for much longer,” wrote Craig Lazzara, managing director at S&P DJI, in a release. “The postCovid rebound of general economic activity, which has stimulated inflation has caused the Federal Reserve to begin increasing interest rates. Soon, we may begin to notice the effects of rising mortgage rates on home values.

Mortgage rates started rising gradually at the beginning of 2011, but they didn’t rise significantly until March. The three-month moving average for February through March is not indicative of a significant rate impact. However, this could be the next step.

“Today’s S&P Case Shiller Index highlights a housing market experiencing a renewed sense of urgency in February, as buyers worked through a small number of homes for sale in an effort to get ahead of surging mortgage rates. According to George Ratiu (manager of economic research at Realtor.com), the imbalance between high demand and low supply drove prices up.

According to Realtor.com calculations, the median home’s monthly payment, financed by a 30-year mortgage, is now $550 more than it was a year earlier. This represents a 46% increase in monthly payments.

The historical trend is for prices to fall six months behind sales. According to the National Association of Realtors, pending sales (which measure contracts signed) have fallen four consecutive months since February. The March readings will be available Wednesday.

We are beginning to see signs that there is a cooling in the housing market as we go through spring. Ratiu said that many buyers have decided to take a look at their timelines and budgets.