U.S. home prices soared in July by a record amount from a year earlier as buyers desperate for homes bid up prices amid a limited supply.
The S&P CoreLogic Case-Shiller 20-city home price index surged 19.9% in July compared with a year ago, the largest gain on records dating back to 2000. In 17 of the 20 cities, prices rose more quickly in July than in June. And prices reached all-time highs in 19 of 20 cities. The one exception was Chicago, where prices are just 0.3% below their 2006 peak.
Sales of new and existing homes have jumped this year, driven by low mortgage rates and a desire for more living space during the pandemic. Sales of existing homes are up 16% in the first eight months of 2021 compared with last year, and they’re up 12% from the same period in 2019.
Phoenix, San Diego, and Seattle reported the biggest price increases, with Phoenix leading the nation for the 26th straight month.
The rising prices are making it harder for younger would-be buyers to purchase a home, with the proportion of sales going to first-time homebuyers falling to 29% last month, the lowest since January 2019, according to the National Association of Realtors.
Meanwhile, investors snapped up 15% of homes in August, up slightly from a year earlier.
There were just 1.29 million homes for sale in August, according to the association. That’s down nearly one-third from a year earlier.
There are some signs that home demand is cooling, and sales ticked down last month. Fewer buyers are waiving home inspections, the association says.
Still, 87% of homes are being purchased after less a month on the market.