After falling for months, home prices are rising again. Here's why.

After falling for seven months, U.S. home prices are rising again as the spring house-hunting season heats up amid a shortage of properties on the market.

Home prices increased 0.7% nationwide in March after growing 2.1% in February, according the S&P CoreLogic Case-Shiller housing index, a barometer of housing prices. The increase surprised economists, who had predicted the index would stay flat. The index is now just 3.6% below its peak in June of last year, according to S&P.

"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," said Craig Lazzara, managing director at S&P DJI, in a statement. "That said, 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."