The booming U.S. housing market hit a fresh milestone in April, as buyers competing for a limited number of homes on the market pushed home-price growth to a record high.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 14.6% in the year that ended in April, up from an 13.3% annual rate the prior month. April marked the highest annual rate of price growth since the index began in 1987.
Home prices have surged this year due to low mortgage-interest rates, which have spurred strong demand, and a continued shortage of homes for sale. Many homes are getting multiple offers and selling above asking price. The home-price surge is widespread around the U.S., affecting buyers and sellers in big cities, suburbs and small towns.
The median existing-home sales price in May rose almost 24% from a year earlier, topping $350,000 for the first time, the National Association of Realtors said earlier this month.
Home sales have started to decline in recent months, because there aren’t enough houses on the market for all the buyers looking to buy. Rising prices have also deterred buyers, and many builders are capping sales to manage their costs and production pace. Some economists expect the pace of home-price growth to slow as well by the end of the year.