According to Case -Shiller indices, home prices in America’s 20 largest cities exploded 14.88% YoY in April – the highest since Nov. 2005
Phoenix, San Diego, Seattle reported the highest earnings of the year among 20 cities surveyed…
All municipalities saw house prices appreciated in double digits (slightly higher than The Fed’s 2% “objective”.)
“It’s really amazing what April has done,” said Craig J. Lazzara, global head of index investment strategy at the S&P Dow Jones Indices.
However, on a national scale, it will only get worse. Case -Shiller National Home Price Index rose 14.59% YoY in April – that’s the fastest moving house price movement on record (back in 1988)
That’s it faster than the previous increase in height in September 2005!
“We have previously suggested that the strength of the U.S. housing market is driven in part by the reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes,” Lazzara added.
“April data continues to be consistent with this assumption. This surge in demand could simply represent an acceleration in purchases that will occur even over the next several years. Alternatively, there may be a secular shift in location preferences, leading to a permanent shift in the demand curve for housing. ”
The question for Jay Powell is – explain how it “passes” if you don’t want to taper or hike rate?
“The forces driving home price growth to new highs last year remain in place and provide little evidence of a decline,” said Matthew Speakman, and economist at Zillow Group Inc., in a statement.
“The number of homes sold has remained small historically, especially with the increased demand for housing.”
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