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US home prices grow at fastest rate in 15 years

Index tracking price growth saw 12% YOY increase in February

(iStock/Illustration by Alexis Manrodt for The Real Deal)
(iStock/Illustration by Alexis Manrodt for The Real Deal)

Home prices continue to soar to new heights.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index rose 12 percent year-over-year in February. That’s up from 11.2 percent in January, when the monthly index grew at the best rate in 14 years and 12 months, just shy of 15 years.

“Strong home price gains continued,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a statement. “[The] 12 percent gain is the highest recorded since February 2006, exactly 15 years ago, and lies comfortably in the top decile of historical performance.”

The national index is up 29.4 percent from the July 2006 peak, he said.

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The national trend played out in all 20 cities (minus Detroit) tracked by the indices, which posted an 11.9 percent year-over-year increase, up from 11.1 percent in the prior month. The 10-city index was up 11.7 percent year-over-year, compared to 10.9 percent the month before. The metro areas that saw the largest price gains continued to be Phoenix, Seattle and San Diego.

The 20-city index was up 19.1 percent from its July 2006 peak and the 10-city index was up 14.7 percent.

Lazzara said the data is “consistent” with the hypothesis that the pandemic has encouraged potential buyers to move from urban apartments to suburban homes. He said it’s too early to say whether the pandemic changed buyers’ preferences in the long term or prompted buyers to move out of cities years ahead of schedule.

Though existing home sales tapered off in February and March, new home sales continue to surge and housing starts jumped 19 percent in March.

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