Sale prices for U.S. houses rose nearly 15 percent in the year leading into April, according to new results from a closely watched gauge of housing prices released Tuesday.
The S&P CoreLogic Case-Shiller U.S. National Home Price Index rose 14.6 percent annually in April, setting a new record high. The index rose 2.1 percent between March and April, but 1.6 percent when seasonally adjusted.
“Housing prices accelerated their surge in April 2021,” said Craig J. Lazzara, managing director at S&P, in a Tuesday analysis. “April’s performance was truly extraordinary.”
The U.S. housing market has shattered records throughout the pandemic as a combination of super low interest rates, cabin fever, telecommuting and federal stimulus spurred a rush of home sales. While sales have begun to slow slightly, prices are still climbing as buyers fight over a depleted housing supply.
Housing prices in all 20 cities tracked by S&P rose by double digits in the year leading into April, with Phoenix (22.3 percent), San Diego (21.6 percent) and Seattle (20.2 percent) seeing the fastest rise.
“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,” Lazzara said. “April’s data continue to be consistent with this hypothesis.”
While upward housing prices are a boon for homeowners, the staggering rise has made buying a home unattainable for many potential first-time buyers. Experts say that while the U.S. is not likely in a housing bubble that could lead to a crash, the current market could exacerbate wealth inequality even further.
“This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question,” Lazzara said.