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Home price growth in the United States hit a new record in May as the housing market continues to warm.
Standard & Poor’s said on Tuesday that its national S&P CoreLogic Case-Shiller home price index posted an annual gain of 16.6% in May, up from 14.8% in April – marking the highest reading in more than 30 years of data. It is also the 12th consecutive month of price acceleration. The 20-City Composite posted an annual gain of 17%, down from 15% a month earlier. 20-City’s results exceeded analysts’ expectations of an annual gain of 16.3%, according to Bloomberg consensus estimates.
“Housing price growth set a record for the second month in a row,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a press release. “A month ago I called April’s performance ‘truly extraordinary’ and this month I find myself running out of superlatives.”
The results were expected as low interest rates and historically low inventories continued to fuel home buying. Last week, the National Association of Realtors reported that the median price of existing homes for all housing types in June reached $ 363,300, the highest level since January 1999.
“This month’s S&P Case Shiller Index highlighted a booming housing market in May 2021, when strong demand and insufficient supply drove home prices up at a record pace,” he said. Realtor.com senior economist George Ratiu said in a previous statement. to the results. “The combination of historically low mortgage rates, business reopenings and the lifting of pandemic restrictions has fueled a buying frenzy with multiple offers, price escalation clauses and contingency waivers. The summer buying season is off to a good start, with many families looking to take advantage of the current market and advantageous financing to find their next home before the start of the school year.
According to the index, home price growth was recorded in all 20 cities, and gains in the 12 months ended May outpaced gains in the 12 months ended April. Prices in 18 of the 20 cities in the index are now reaching all-time highs.
“The strength of the market continues to be pervasive,” Lazarra said.
Phoenix once again led the 20-City Composite, registering an annual gain of 25.9%. The city has been leading the mix for two years now. San Diego and Seattle followed with gains of 24.7% and 23.4% respectively.
“Despite the surge in house prices, the acceleration in home price growth has not deterred potential buyers from becoming homeowners,” said Selma Hepp, deputy chief economist at CoreLogic, in a press release before. the results. “In fact, the number of homes sold above asking price continues to increase, with more than half of homes sold now closing above the original listing price.”
“I expect home price growth to continue to rise until more existing homeowners choose to sell their homes and more new homes come onto the market,” said Bill Dallas, president of Finance of America Mortgage, in a statement ahead of the results.
Amanda Fung is a writer at Yahoo Finance.
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