S&P reported on Tuesday its Case-Shiller Home Price Index, which tracks home prices in 20 U.S. metropolitan areas, jumped 11.9 percent y-o-y in February, following an unrevised 11.1 percent y-o-y surge in January. This was the biggest annual gain in house prices since March 2014.

Economists had expected a climb of 11.7 percent y-o-y.

Phoenix (+17.4 percent y-o-y), San Diego (+17.0 percent y-o-y) and Seattle (+15.4 percent y-o-y) recorded the highest y-o-y advances among the 20 cities in February. Overall, 19 of the 20 cities reported greater price gains in the year ending February 2021 versus the year ending January 2021.

Meanwhile, the S&P/Case-Shiller U.S. National Home Price Index, which measures all nine U.S. census divisions, surged 12.0 percent y-o-y in February, following an 11.2 percent y-o-y jump in the previous month. This was the biggest annual advance on record.

“The National Composite’s 12.0% gain is the highest recorded since February 2006, exactly 15 years ago, and lies comfortably in the top decile of historical performance” noted Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “These data remain consistent with the hypothesis that COVID has encouraged potential buyers to move from urban apartments to suburban homes. This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years. Alternatively, there may have been a secular change in preferences, leading to a permanent shift in the demand curve for housing. Future data will be required to analyze this question.”