Rosa Arrigo (center) and Elisa Rosen (right), real estate agents, host an open house in West Hempstead on April 18, 2021.
According to the S&P CoreLogic CaseShiller national home price index, June saw a 18.6% increase in home prices, compared with May's 16.8% increase.
This is the largest annual increase in the index's history dating back to 1987. Nationally, prices are 41% higher now than they were during the housing boom of 2006.
This survey measures repeat sales over time, unlike other median price surveys that can be affected by the type of homes sold.
The composite 10-City rose 18.5% from 16.6% the previous month. The 20-City composite grew 19.1% from 17.1% the month before.
The strongest price increases among the 20 cities were reported by Seattle, San Diego and Phoenix. The prices in Phoenix rose 29.3% year-overyear. They rose 27.1% in San Diego, while they rose 25.0% in Seattle. All 20 cities saw higher prices in June 2021 than May 2021.
Craig Lazzara (managing director, global head of index strategy, S&P DJI), stated that the last few months were extraordinary in terms of the price gains and the consistency of gains throughout the country. "All 20 cities saw a rise in June. All 20 cities gained more in the twelve months ending in June than in the twelve months ended May."
He said that prices in almost every 20-city index city, except Chicago, are at an all-time high. The same goes for the national composition and the 10-, 20-, and 20-city indices.
Due to high demand and low supply, home prices continue to rise. According to the National Association of Realtors, although supply has increased month-to-month, it was still down by 12% in July, year-over-year.
Peter Boockvar is the chief investment officer of Bleakley Advisory group. He stated that prices are increasing at a "really out of control rate that is unsustainable, and unhealthy."
However, home sales have begun to slow down. According to the National Association of Realtors, signed contracts for existing homes fell in July. The average price gap between sales and prices is about six months. This could indicate that price gains are not as rapid as they were for more than a year.
Glenn Brunker, President of Ally Home, stated that 45% of buyers have delayed buying a home because of market conditions. 29% blame high home prices while 20% blame homes selling too fast.
Prices are strong because of low mortgage rates. The Federal Reserve may slow down its purchases of mortgage-backed securities, which would cause rates to rise. However, this is unlikely in the near future.
