Home prices rose more quickly this spring and summer than at any point since the late 1980s, a trend that’s easy to spot on a chart of a widely used index.
The S&P CoreLogic Case-Shiller Index rose to its highest reading ever in July, according to data released Tuesday. The nationwide, seasonally adjusted index, which has been rising steadily since 2012, posted four of its steepest monthly gains between March and June, while the most recent reading in July showed the sixth-steepest increase since the index was created in 1987. Home prices in July were a record 19.7% higher than a year earlier.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes,” Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI wrote in a commentary. “July’s data are consistent with this hypothesis.”
Other factors keeping the heat on home prices: low mortgage rates and a low supply of homes for sale. The mix of high demand and a shortage of inventory has made for frenzied competition among homebuyers, although more recent data suggests the bidding wars have cooled down a bit since July.
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