Inflation Nation: Home Prices Rise at Fastest Pace Ever

Home prices in April jumped 14.6 percent compared with a year ago, up from a 13.3 percent rise in March, the S&P CoreLogic Case-Shiller National Home Price Index showed Tuesday.

This is the fastest annual pace on record, beating the housing bubble high of 14.3 percent in 2005. On a monthly and seasonally adjusted basis, home prices nationally rose 1.6 percent, also an all-time high.

“April’s performance was truly extraordinary,” said Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “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.”

In addition to the national index, Tuesday’s release included both the index of the ten and 20 largest cities. The 10-city composite was up 14.4 percent year over year, an acceleration from March’s 12.9 percent annual gain. That’s the biggest annual jump on record since January 2006.

Compared with a month ago, prices in the 10-city index were up 1.4 percent. That’s actually a deceleration from March’s 1.5 percent monthly gain.

The 20-city composite jumped 14.9 percent higher,  compared with 13.4 percent in March. This is the fastest pace of annual price gains since December 2005.

Compared with a month ago, prices were up 1.6 percent, the biggest monthly gain since a short-lived spike in April 2013.

Economists had forecast a 1.2 percent gain for the 20-city index on a monthly basis and a 13.5 percent gain annually.

Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in April. Phoenix led the way with a 22.3 percent year-over-year price increase, followed by San Diego with a 21.6 percent increase and Seattle with a 20.2 percent increase. All 20 cities reported higher price increases in the year ending April 2021 versus the year ending March 2021.

“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. 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,” Lazzara said.

It’s still unclear how much of the surge in home prices is due to the pandemic and how much is due to rising crime, anti-police politics, and racial strife in big cities. In addition, the U.S. may be undergoing a change in housing preference away from cities and toward single-family homes in the suburbs.