US Housing Prices Surged to 16.6% in May

Home price growth in the United States has reached new heights: On Tuesday, July 27, S&P Dow Jones Indices (S&P DJI) released the May 2021 results for S&P CoreLogic Case-Shiller Indices. This is the primary indicator for housing prices in the US, and covers all nine US census divisions. Standard & Poor’s revealed that home prices continue to increase nationwide - May’s 16.6% annual growth surpassed April’s 14.8% and represents the highest rise in over three decades of data gathering. Furthermore, May 2021 was the twelfth consecutive month of price acceleration.

The 10-City Composite showed a 16.4% annual gain, up from 14.5% in April. The 20-City Composite grew even further, at 17% YoY (15% for April).

Of the 20 cities included, San Diego, Phoenix, and Seattle reported the highest annual gains in May. Phoenix came first with a 25.9% YoY price increase, followed by San Diego with a 24.7%, and Seattle with a 23.4% surge. Additionally, all 20 cities saw higher price increases in the twelve months leading up to May 2021 in comparison with the year ending April 2021. To top it off, prices in 18 of the index's 20 cities stand at all-time highs at the moment.

Craig J. Lazzara, S&P DJI managing director and global head of index investment strategy, said: “Housing price growth set a record for the second consecutive month. A month ago, I described April’s performance as 'truly extraordinary,' and this month I find myself running out of superlatives.”

The results didn’t come as a surprise, as the combination of historically low interest rates with many mortgage lenders, low inventory, lifting of pandemic restrictions, and business re-openings led to a buying frenzy. According to the National Association of Realtors (NAR), the median existing-home price for all housing types reached $363,300 this June, the highest recorded since January 1999.