Home-Price Gains Set Another Record, Fueled by Bidding Wars
U.S. home prices once again jumped the most in more than 30 years.
(Bloomberg) -- U.S. home prices once again jumped the most in more than 30 years.
The S&P CoreLogic Case-Shiller index of property values nationwide surged 18.6% in June from a year earlier, according to a statement on Tuesday. That followed a 16.8% gain in May and was the 13th straight month that price gains accelerated.
June’s increase was the largest in data going back to 1988 as buyers, armed with cheap mortgages, competed for a tight supply of homes, fueling bidding wars across the country.
“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” said Craig Lazzara, global head of index investment strategy at S&P Dow Jones Indices. “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.”
A measure of prices in 20 U.S. cities climbed 19.1%, beating the median estimate in a Bloomberg survey of economists.
The unrelenting price increases have made it hard for buyers to find properties they can afford. Contracts to buy previously owned homes in the U.S. fell unexpectedly for a second straight month in July, the National Association of Realtors reported Monday.
Among the 20 cities, Phoenix led the way with a 29.3% gain. Following were San Diego, at 27.1%, and Seattle, at 25%.
Separately Tuesday, a Federal Housing Finance Agency index showed home prices nationwide rose 17.4% in the second quarter from a year earlier and 4.9% from the previous three months. The measure, which uses purchase data from Fannie Mae and Freddie Mac, has increased for 40 consecutive quarters.
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