Rising US home prices accelerated in April at the fastest pace in more than 30 years, as strong housing demand continued to emerge in response to the shortage of residential real estate.
According to data on Tuesday, the S & P Case-Shiller National Home Price Index, which covers all nine divisions of the US Census, rose 14.6% year-on-year in April. According to the report, this was “the highest reading in more than 30 years,” following a surge of 13.3% annually in March.
Meanwhile, complex facilities in 20 cities covering the US metropolitan areas such as Dallas, Miami, New York, and San Francisco increased 1.6% month-on-month and 14.9% year-on-year.
According to economists surveyed by Refinitiv, this is the largest annual increase since December 2005, compared to an expected increase of 14.5% per year.
Phoenix, San Diego and Seattle reported the highest year-over-year growth of the 20 cities in April.
Craig Lazara, Managing Director of the S & P Dow Jones Index and Global Head of Index Investment Strategy, said:
The boom, which has been partially driven by pandemic-related demand for suburban housing, may “represent the acceleration of purchases that would have occurred anyway in the next few years,” he said.
US home prices soared last year as Americans used record low mortgage rates to soar suburban homes. That demand, coupled with tight housing supplies, has pushed prices to record levels. This was exacerbated earlier this year due to the sharp rise in timber costs.
Soaring home prices have discouraged first-time buyers, according to economists, but some expect demand for suburban real estate to diminish as pandemic concerns diminish. Another report from the Conference Board on Tuesday showed that the proportion of Americans planning to buy homes, cars, and major appliances increased this month.
Rising home prices could bring more sellers to the market, but economists have to find a place to live unless these people are selling second homes or villas, resulting in a supply-demand mismatch. It warns that it may have a slight impact.
There are some signs that home inventories are starting to grow. U.S. Department of Commerce last week Supply of new home May sales increased 15,000 to 330,000, up 5.8% from a year ago. This is equivalent to 5.1 months of supply at the current sales pace from 3.6 months in January.
Matthew Speakman, Zillow’s economist, said: “But the return to a balanced market is still a long way off, and there are few, if any, signs that house price increases will soon begin to subside.”
Rising House price It is also drawing the attention of the Federal Reserve authorities.
This week, Federal Reserve Bank of Boston Governor Eric Rosengren said Told the Financial Times The United States cannot tolerate a “cycle of boom and collapse” in the housing market that threatens financial stability. He said cash-only buyers are more likely to win bid contests in Boston.
Other Fed officials, including Federal Reserve Bank of Dallas Governor Robert Kaplan, are calling on the central bank to reassess its support for the housing market through the purchase of $ 40 billion in mortgage-backed securities each month.
House price figures on Tuesday will also affect broader inflation data, said James Knightley, chief international economist at ING. The primary rent paid by the tenant and the owner’s equivalent rent (the amount that the owner evaluates to charge when renting a house) occupy one-third of the merchandise basket used to calculate the CPI. He said.
“Assuming the relationship is maintained, we expect the housing components to be significantly higher in the coming months,” he said.
U.S. home prices are rising at the fastest pace in over 30 years
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