U.S. home prices jumped the most in more than 30 years in April.
Nationally, the S&P CoreLogic Case-Shiller index of property values climbed 14.6% from a year earlier, the biggest gain in data going back to 1988. That came after 13.2% increase in March, and was the 11th straight month that price gains accelerated.
Home prices in 20 U.S. cities, meanwhile, jumped 14.9%, beating the median estimate in a survey of Bloomberg economists and was the biggest gain since 2005.
“April’s performance was truly extraordinary,” said Craig J. Lazzara, global head of index investment strategy at S&P Dow Jones Indices. “We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the Covid pandemic, as potential buyers move from urban apartments to suburban homes. April’s data continue to be consistent with this hypothesis.”
Low mortgage rates and demand for properties in the suburbs have fueled the U.S. housing market for more than a year, with a shortage of homes to buy helping to push prices higher. Many buyers are running into issues finding properties they can afford. Sales of previously owned homes in the U.S. fell for a fourth straight month in May.
Still, home prices are expected to remain elevated. Builders cite high materials prices, supply shortages and a limited number of skilled workers as ongoing challenges as they race to complete new homes.
“The forces that have propelled home price growth to new highs over the past year remain in place and are offering little evidence of abating,” Matthew Speakman, and economist at Zillow Group Inc., said in a statement. “The number of available homes for sale remains historically small, particularly given the elevated demand for housing.”