Demand for single-family homes is continuing to send price tags through the roof, as experts point to record price gains last month.
According to the most recent S&P CoreLogic/Case-Shiller Indices, home prices saw a 14.6% gain in April, up from 13.3% in March. The price surge represents the highest reading on the index in more than three decades, according to experts.
Year-over-year, the 10-City Composite increased 14.4%, while the 20-City Composite increased 14.9%.
All 20 cities saw higher annual price increases, with Phoenix, San Diego and Seattle staying at the head of the pack with the highest gains. The markets recorded increases of 22.3%, 21.6% and 20.2%, respectively.
The complete data for the 20 markets measured by S&P:
Atlanta, Ga.
April/March: 1.7%
Year-Over-Year: 12.3%
Boston, Mass.
April/March: 2.5%
Year-Over-Year: 16.2%
Charlotte, N.C.
April/March: 2.4%
Year-Over-Year: 15.0%
Chicago, Ill.
April/March: 1.9%
Year-Over-Year: 9.9%
Cleveland, Ohio
April/March: 1.9%
Year-Over-Year: 13.3%
Dallas, Texas
April/March: 2.9%
Year-Over-Year: 15.9%
Denver, Colo.
April/March: 2.7%
Year-Over-Year: 15.4%
Detroit, Mich.
April/March: 2.2%
Year-Over-Year: 13.3%
Las Vegas, Nev.
April/March: 2.5%
Year-Over-Year: 12.5%
Los Angeles, Calif.
April/March: 1.8%
Year-Over-Year: 14.7%
Miami, Fla.
April/March: 2.4%
Year-Over-Year: 14.2%
Minneapolis, Minn.
April/March: 2.2%
Year-Over-Year: 11.3%
New York, N.Y.
April/March: 0.8%
Year-Over-Year: 13.5%
Phoenix, Ariz.
April/March: 3.3%
Year-Over-Year: 22.3%
Portland, Ore.
April/March: 2.1%
Year-Over-Year: 15.4%
San Diego, Calif.
April/March: 3.2%
Year-Over-Year: 21.6%
San Francisco, Calif.
April/March: 3.1%
Year-Over-Year: 15.1%
Seattle, Wash.
April/March: 3.1%
Year-Over-Year: 20.2%
Tampa, Fla.
April/March: 2.3%
Year-Over-Year: 15.4%
Washington, D.C.
April/March: 2.3%
Year-Over-Year: 13.6%
What the Industry Is Saying:
“April’s performance was truly extraordinary. The 14.6% gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by the reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. April’s data continue to be consistent with this hypothesis. 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.
— Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices
“The largest-ever annual price appreciation is the result of an ongoing housing shortage. The 15% gain in the Case-Shiller price index, which attempts to measure constant, quality price gain, would translate into a wealth gain of $45,000 for a typical homeowner in the U.S. Homeowners in the super-hot Seattle market accumulated $120,000 on average over the past 12 months. The median home price, as reported by NAR, also experienced the largest price gain ever at 24% in May. But be mindful that the median price is being skewed upward due to an unusual amount of upper-end home sales and does not represent the typical homeowner price appreciation.
“Expect continuing solid price gains in the upcoming months. Some calming of the market is only expected to happen in late autumn of this year and into 2022. Home price growth will be in the single digits in 2022. More inventory will show up as homebuilders ramp up production and from the winding down of the mortgage forbearance program. Also, some investors who could not evict due to federal law may now decide to unload later this year.
“A home price decline is unlikely. However, should it occur, since price gains have been unusually large, it will be of short duration. Many homebuyers would view home price declines as a second-chance opportunity after getting outbid in current multiple-bid market conditions.”
— Dr. Lawrence Yun, Chief Economist, National Association of REALTORS®
Jordan Grice is RISMedia’s associate content editor. Email him your real estate news to jgrice@rismedia.com.
