Home prices rose for a second straight month as buyers returning to the market competed over few homes for sale.

A measure of prices nationally increased 0.4% in March from a month earlier, according to seasonally adjusted data from S&P CoreLogic Case-Shiller.

Demand is picking back up in parts of the US as buyers start to adjust to much higher borrowing costs that shot up starting last year. But transactions remain relatively slow as homeowners are often reluctant to sell and give up lower rates, keeping inventory for previously owned homes tight.

“Two months of increasing prices do not a definitive recovery make, but March’s results suggest that the decline in home prices that began in June 2022 may have come to an end,” Craig Lazzara, managing director at S&P Dow Jones Indices, said in a statement.

On a yearly basis, prices rose 0.7% in March, slower than the 2.1% gain in February. Miami and Tampa, Florida, posted the biggest year-over-year increases in a measure of some of the largest metro areas.

Buyers are still confronting high borrowing costs compared to a year ago. Mortgage rates have climbed recently as markets react to deliberations on the US debt ceiling. The average rate on a 30-year loan hit 6.57% last week, up from 3.22% in early January 2022, according to data from Freddie Mac.

“The challenges posed by current mortgage rates and the continuing possibility of economic weakness are likely to remain a headwind for housing prices for at least the next several months,” Lazzara said. 

This article was provided by Bloomberg News.