The S&P/Case-Shiller home price index increased 5.4% year-on-year in March, exceeding expectations for a 5.2% rise, after a 5.4% gain in February.

Portland, Seattle, and Denver were the largest contributors to the rise, where prices climbed by 12.3% year-on-year, 10.8% and 10.0%, respectively.

"Home prices are continuing to rise at a 5% annual rate, a pace that has held since the start of 2015," managing director chairman of the index committee at S&P Dow Jones Indices David Blitzer said.

"The economy is supporting the price increases with improving labour markets, falling unemployment rates and extremely low mortgage rates. Another factor behind rising home prices is the limited supply of homes on the market," he added.

On a monthly basis, the S&P/Case-Shiller home price index rose 0.9% in March.

The S&P/Case-Shiller home price index measures single-family home prices in 20 U.S. cities.