Home prices accelerated to new highs in April, a “truly extraordinary” surge that outpaced previous months’ record numbers.
That was the term used by Craig Lazzara, global head of index investment strategy for S&P Dow Jones Indices, to describe the latest figures from the S&P CoreLogic Case-Shiller index, which shot up 14.6 percent year-over-year in April, beating a then-record 13.2 percent year-over-year gain in March.
Those numbers represent a 13.3 percent increase over March and a 34.9 percent from the index’s previous all-time peak in July 2006.
“The 14.6 percent gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data,” Lazarra said. “Housing prices in all 20 cities rose; price gains in all 20 cities accelerated; price gains in all 20 cities were in the top quartile of historical performance.”
The home price index, which tracks the housing market in 20 cities including New York City, Los Angeles, Miami and Chicago, similarly reported a 14.9 percent increase year-over-year, up 1.5 percent from the prior month. The index is 24.5 percent above its previous high point in 2006.
The cities of Phoenix, Seattle and San Diego once again reported the largest annual gains, with each topping 20 percent.
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In New York, home prices growth jumped 13.5 percent year-over-year. Miami home prices saw a year-over-year gain of 14.2 percent, while Los Angeles saw a 14.7 percent jump. Chicago’s metro area reported the lowest price growth, with a 9.9 percent increase.
When comparing April 2021 to April 2020, when much of the country’s housing markets were under restrictions put in place to curb the spread of Covid-19, the results may not seem as impressive. But economists maintain that in addition to favorable annual comparisons, home price growth is breaking records that have held strong for decades.
Selma Hepp, deputy chief economist at CoreLogic, said April’s price growth was the strongest since data began being collected in 1987 — and she expects double-digit price growth to continue for the rest of the year.
“Mortgage interest rates remain 50 percent lower than they were in 2005, when home price growth last peaked,” she said in a statement. “It’s probable that continued massive demand will keep pressure on prices.”
As prices rise, some buyers are balking. The rate of existing sales fell for the fourth consecutive month in May as prices hit a new record high of more than $350,000.