Home prices surged over 20% in March as interest rates also rose, according to S&P Case-Shiller

Home prices rose in March despite rising mortgage rates.

According to the S&P CoreLogic Case-Shiller Home Price Index, home prices were 20.6% higher in March of this year than they were in March of the previous year. The February gain was 20%. The three-month average is the index.

According to Mortgage News Daily, the average rate on the 30-year fixed mortgage was 3.61% at the start of January and 4.51% at the end of March.

The Case-Shiller 10-city index increased in March from February. The 20-city index saw a year-over-year gain of 21.2%, up from 20.3% in the previous month. March's reading was the highest year-over-year price change in more than 35 years of data.

For the first time in three years, Phoenix fell from the top gainer spot. The highest annual gains were seen in Miami, with a 32.0% increase, and in Phoenix, with a 32.4% increase. Seventeen of the 20 cities reported higher price increases in the year ending in March.

Craig Lazzara, managing director at S&P DJI, says those who have been anticipating a deceleration in the growth rate of U.S. home prices will have to wait at least a month longer.

Minneapolis, Washington and Chicago saw the smallest price gains of double digits from a year ago.

Home sales have been falling for several months, so the expectation is that prices will ease. Real estate agents report that they are still seeing multiple offers for homes that are priced well, despite the high demand. The sellers are worried that they will miss out on the last days of the hot market as there is more supply coming on the market.

Mortgages are becoming more expensive as the Federal Reserve has begun to raise interest rates, suggesting that the macroeconomic environment may not support extraordinary home price growth for much longer. Lazzara said that it is difficult to predict when the price gains will decelerate.