American house prices are rising at the fastest rate in more than 30 years

Growth in home prices in the U.S. has accelerated from April at the fastest pace in more than three decades, as strong demand for homes has continued to face a shortage of residential property.

The national S&P Case-Shiller home price index, which covers all nine U.S. census divisions, rose 14.6 percent year-on-year in April, data showed Tuesday. That followed an annual jump of 13.3 percent in March, and was “the highest reading in more than 30 years,” according to the report.

Meanwhile, the composite of 20 cities, which cover U.S. metropolitan areas including Dallas, Miami, New York and San Francisco, has increased 1.6 percent from the previous month and 14.9 percent year-over-year.

That has been the largest annual increase since December 2005 and compared to forecasts for an annual increase of 14.5 percent, according to economists interviewed by Refinitiv.

Phoenix, San Diego and Seattle reported the highest year-over-year gains among cities on April 20.

“The April performance was truly extraordinary,” said Craig Lazzara, general manager and global leader of S&P Dow Jones Indices ’investment strategy.

While the boom has been driven in part by the pandemic demand for suburban homes, he said it could also “represent an acceleration of purchases that would be made however over the next few years.”

U.S. house prices rose last year as Americans took advantage of low mortgage rates and exploited suburban homes. This demand, combined with a tight supply of homes, has pushed prices to record levels. It was further aggravated earlier this year by a sharp rise in timber costs.

The home price economy is deterring buyers for the first time, economists say, although some expect suburban property demand to decline as pandemic fears disappear.

There are also some signs that housing inventory is starting to grow. The U.S. Department of Commerce last week said provided with nine houses sales rose from 15,000 in May to 330,000, up 5.8 percent from a year ago. That represented the 5.1-month offer at the current selling rate, up from 3.6 months in January.

“Inventory increases in recent weeks suggest that a break from these red market conditions may begin to form,” said Matthew Speakman, an economist at Zillow. “But the return to a balanced market is far from over, and there are few, if any, signs that house price appreciation will begin to decline any time soon.”

Rising house prices they also caught the attention of Federal Reserve officials.

This week Eric Rosengren, president of the Boston Federal Reserve, said the Financial Times that the United States cannot afford a “boom and bust cycle” in the housing market that would threaten financial stability. He said it had become common for buyers only in numbers to prevail in bidding competitions in Boston.

Other Fed officials, including Dallas Fed Chairman Robert Kaplan, have ordered the central bank to reassess its support for the real estate market through its $ 40 billion monthly purchases of securities. supported by the agency.

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