S&P Dow Jones Indices (S&P DJI) reported on Tuesday its Case-Shiller Home Price Index, which tracks home prices in 20 U.S. metropolitan areas, surged 17.0 percent y-o-y in May, following a revised 15.0 percent y-o-y climb in April (originally a 14.9 percent y-o-y jump).

Economists had expected a climb of 16.4 percent y-o-y.

Phoenix (+25.9 percent y-o-y), San Diego (+24.7 percent y-o-y) and Seattle (+23.4 percent y-o-y) recorded the highest y-o-y advances among the 20 cities in May. Overall, all 20 cities reported greater price gains in the year ending May 2021 versus the year ending April 2021.

Meanwhile, the S&P/Case-Shiller U.S. National Home Price Index, which measures all nine U.S. census divisions, soared 16.6 percent y-o-y in May, following a 14.8 percent y-o-y surge in the previous month. This was the biggest annual advance on record.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. May’s data continue to be consistent with this hypothesis,” noted Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.”