Home prices

Sales of new U.S. homes fell in February for a second month, suggesting high prices and rising mortgage rates may be keeping prospective buyers on the sidelines.

Contract closings decreased 7.2% in February from the prior month to an annualized 6.02 million, figures from the National Association of Realtors showed Friday.

All indicators show that the renting market is heating up, as would-be buyers of houses increasingly turn to rentals because they can’t find — and can’t afford — their dream houses.

Before the pandemic, the sprawling architecture and physical distance from neighbors, bars and restaurants seemed out of step with city-obsessed millennials. That’s changed.

Rising interest rates are likely to further slow the rate of appreciation, the Federal Housing Finance Agency said in its quarterly Home Price Index report.

Remote workers and young families fleeing coastal cities for the Sun Belt during the pandemic spurred double-digit increases in housing costs and squeezed supply.

But Boise and Austin homebuyers pay the biggest premiums, according to a ranking of the top overvalued markets.

A measure of home prices in 20 U.S. cities jumped 18.3%, down from 18.5% in October, the S&P CoreLogic Case-Shiller index showed Tuesday. It marked the fourth straight month that home-price appreciation has cooled off ever so slightly.

In October, those factors outweighed a smaller rise in annual wage growth, and the gap will keep widening, according to a new First American Real House Price Index report.