The rate of rise in the price of housing in the US touches 30-year highs. The index that measures prices has been on the rise for more than a year.
The rise in house prices in the US set a new record, driven by bidding wars between potential buyers, who continue to push bids to the maximum due to the lack of supply. Specifically, the advance in prices recorded a 30-year high, surpassing the milestones that had already been set in previous months.
The S&P CoreLogic Case-Shiller index that measures real estate values increased 18.6% in June from a year earlier, according to a statement Tuesday. This jump represents an acceleration compared to 16.8% in May and was the thirteenth consecutive month in which price gains accelerated.
June’s rise was the largest in a series of data dating back to 1988, as buyers, armed with cheap mortgages offered by banks for the Fed’s zero interest rates, compete for an increasingly scarce supply. housing, fueling bidding wars across the country.
“The past few months have been extraordinary, not just in the level of price gains, but in the consistency of earnings across the country,” said Craig Lazzara, global director of investment strategy for S&P Dow Jones Indices. “The strength in the US housing market is being driven in part by the reaction to the covid pandemic, as potential buyers move from urban apartments to suburban homes”, away from big cities.
But not everything is a flight to rural areas. The index that measures prices in the 20 largest US cities rose 19.1%, beating the median estimate in a Bloomberg survey of economists. Among the 20 cities, Phoenix led the way with a 29.3% gain. They were followed by San Diego, with 27.1%, and Seattle, with 25%.
Relentless price increases have made it difficult for buyers to find properties that they can afford. Contracts to buy second-hand homes unexpectedly fell for the second month in a row in July, the National Association of Realtors reported Monday.
For its part, the index of the Federal Housing Finance Agency showed that house prices across the country increased 17.4% in the second quarter compared to the previous year and 4.9% compared to the three previous months. The measure, which uses purchase data from mortgage insurers Fannie Mae and Freddie Mac, has been on the rise for 40 consecutive quarters.