U.S. home prices surged the most since the end of 2005 as a shortage of properties to buy fueled bidding wars.
Nationally, the S&P CoreLogic Case-Shiller index of property values climbed 13.2% in March, the biggest gain since December 2005. That came after a jump of 12% in February.
The real estate market has been surging for the past year as Americans seek properties in the suburbs, with low mortgage rates driving the rally. A dearth of available properties has also helped push up prices.
“These data are consistent with the hypothesis that Covid-19 has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig J. Lazzara, global head of index investment strategy at S&P Dow Jones Indices. “This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years.”
Phoenix (20%), San Diego (19.1%) and Seattle (18.3%) posted the biggest increases among the 20 cities tracked by Case-Shiller.
"Following sharp monthly declines in January and February, March saw a more modest retreat in inventory, suggesting that the historically tight inventory pressures may finally be starting to ease," Zillow Economist Matthew Speakman said in statement about the report. "But that anticipated relief has not yet materialized and the competition for the relatively few homes on the market remains red hot... All told, there is little, if any, indication that home prices will slow their appreciation anytime soon."
