U.S. home prices have skyrocketed at a rate that hasn’t been seen in more than 30 years, according to the latest data from Standard & Poor’s S&P CoreLogic Case-Shiller Indices.
What Happened: The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, recorded a 14.6% annual gain in April, up from the 13.3% annual gain in March.
This marked the eleventh consecutive month of accelerating home prices.
The indices’ 10-City Composite annual increase was 14.4%, up from 12.9% in the previous month, while the 20-City Composite posted a 14.9% year-over-year gain, up from 13.4% one month earlier. Phoenix, San Diego and Seattle reported the highest year-over-year gains among the 20 cities in April with annual price spikes of 22.3%, 21.6% and 20.2%, respectively.
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What It Means: The housing market was one of the strongest sectors of the U.S. economy during the height of the COVID-19 pandemic and it is showing no signs of softening as the nation moves into a post-pandemic period.
“April’s performance was truly extraordinary,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “The 14.6% gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data.”
Lazzara observed that price gains in all of the cities in the 20-City Composite “were in the top quartile of historical performance. In 15 cities, price gains were in top decile. Five cities — Charlotte, Cleveland, Dallas, Denver and Seattle — joined the National Composite in recording their all-time highest 12-month gains.”
What Else Happened: How long this go-go market can continue is unclear. Lazzara acknowledged that “more time and data will be required to analyze this question.”
New data from the brokerage Redfin (NASDAQ: RDFN) found buyer requests for home tours and other home-buying services from the company’s agents dropped below 2020 levels for the first time this year, albeit a relatively scant 1% year-over-year for the week ending June 20.
Redfin also pointed out the Mortgage Bankers Association’s home purchase index has been in decline 11% since the week ending March 24.
“Some homebuyers are pausing or abandoning their plans to buy because homes in their area have gotten too expensive,” said Redfin Chief Economist Daryl Fairweather. “Even though there are no signs of prices coming down, homebuyers may face a bit less competition and have a bit more selection of homes this summer than they did earlier this year.”
(Illustration: Mohamed Hassan / Pixabay.)
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