House for sale on Wednesday, June 9, 2021 in Susanville, CA.
Gary Coronado | Los Angeles Times | Getty Images
April house prices rose 14.6% year-on-year in April. That’s up from a 13.3% increase in March. According to the National Home Price Index, S&P CoreLogic Case-Shiller
Among the major cities covered by the index, the composite 10 cities rose 14.4 percent year-on-year, up from 12.9 percent the previous month. The composite 20 cities rose 14.9 percent, up from 13.4 percent in March.
Phoenix, San Diego and Seattle reported the highest year-over-year increases. All increased by more than 20% from the previous year.
“The April performance was really extraordinary. The 14.6% increase in the National Composite was the highest read of S&P CoreLogic Case-Shiller data in more than 30 years,” said Craig Lazzara, managing director and head of global index investment strategy at S&P DJI. said .
Not only will house prices go up in all 20 cities. But prices are also rising rapidly and are in the highest quartile of historical performance.
Five cities – Charlotte, Cleveland, Dallas, Denver and Seattle – earned the largest annual profit ever.
“We previously suggested that the strength of the US housing market This is partly due to the response to the COVID-19 pandemic. This is because potential buyers move from city apartments to suburban homes. April’s data remains consistent with this assumption,” added Lazzara.
The price increase has been expanding over the past 11 months. as buyer demand continues to outpace supply Inventory of homes for sale slightly increased in May compared to April. But still below 21% from May 2020 according to the National Real Estate Association.
Home sales have declined over the past few months. due to low supply Especially at the entry level of the market and very high prices. Single-family housing startups have also declined. As home builders try to keep up with the huge demand amid land prices. high labor and material costs
The housing market price bubble is increasing. But the fundamentals of today’s market are otherwise.
Although house price growth hits new highs But the risk of price declines has dropped below pre-epidemic levels and by the summer of 2006, when house prices hit their highest levels. This could be due to good mortgage rates and income growth still maintaining mortgage ratios. Paying for monthly household income is much lower today,” said Selma Hepp, deputy chief economist at CoreLogic.
“As a result, the demand for buyers has increased. coupled with the lack of inventories for sale will continue to put pressure on prices This is likely to continue to double-digit increases through the third quarter of 2020,” she added.
However, there is a growing division between what is and does not exist in the home.
Sales activity is increasing exponentially from higher levels of the market. But it dropped to the bottom as more buyers dropped the price. Some blame the Federal Reserve for keeping mortgage rates understated through its bond-buying program. Last year’s record-low rates helped home buying boom. But those rates, which are now slightly higher, cannot compensate for the huge price increases.
Peter Boockvar, chief investment officer at Bleakley Advisory Group, said: “So much for the Fed’s all-inclusive monetary policy that low-income earners can’t afford housing right now.