Standard & Poor’s reported that U.S. home prices continued to rise sharply in the spring as the Case-Shiller 20-City Home Price Index jumped 2.4 percent in May and that home values are up 12.2 percent from a year ago, the fastest pace of appreciation since March 2006.
On a seasonally adjusted basis, the 20-city index rose 1.0 percent and it’s important to remember that this is really a three-month rolling average reflecting activity in March and April as well as May, meaning that recently rising interest rates have yet to impact the data.
Record low mortgage rates along with strong investor demand and low inventory have all contributed to the recent price surge, though the months ahead are unlikely to see similar results as some housing demand has surely been pulled forward as rates rose.
Former housing bubble hotspots lead the year-over-year gains as home prices rose 24.5 percent in San Francisco, 23.3 percent in Las Vegas, and 20.6 percent in Phoenix.
Source: Iacono Research
