US home prices rose before viral outbreak shut economy

FILE - This Aug. 15, 2005, file photo, shows a housing development with the Las Vegas Strip in the background. Las Vegas-area home prices hit a record high in March, ahead of the economic shutdown prompted by the coronavirus pandemic. Las Vegas Realtors reported Tuesday, April 7, 2020, the median sales price of previously owned single-family homes climbed to $319,000, topping the previous record $316,000 set in February and up 6.3% from March 2019. Home sales were up 5.2% during the month, and up 11.7% for condominiums and townhouses. (AP Photo/Joe Cavaretta, File) (Copyright 2005 The Associated Press. All rights reserved)

WASHINGTON – U.S home prices were rising at a steady pace in February, before the viral outbreak shuttered much of the economy and caused a sharp decline in home sales.

March sales of new and existing homes then plummeted as much of the U.S. population sheltered in place.

The S&P CoreLogic Case-Shiller 20-city home price index rose 3.5% in February from a year ago, up from a 3.1% increase in January. Solid hiring at the start of the year and low mortgage rates had supported rising home sales and prices, but that has deteriorated rapidly.

Existing home sales fell 8.5% in March, according to the National Association of Realtors, while new home sales fell 15.4%, the government said.

Home price gains will likely slow in the coming months with sellers forced to cut asking prices. However, fewer properties are being listed for sale with activity all but shut down, which could provide some pricing support.