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, soared 19.1 percent y-o-y in June, following a revised 17.0 percent y-o-y jump in May (originally a 17.1 percent y-o-y surge). 

Economists had expected a climb of 18.5 percent y-o-y.

Phoenix (+29.3 percent y-o-y), San Diego (+27.1 percent y-o-y) and Seattle (+25.0 percent y-o-y) recorded the highest y-o-y increases among the 20 cities in June. Overall, all 20 cities reported greater price gains in the year ending June 2021 versus the year ending May 2021.

Meanwhile, the S&P/Case-Shiller U.S. National Home Price Index, which measures all nine U.S. census divisions, climbed 18.6 percent y-o-y in June, following a 16.8 percent y-o-y surge in the previous month. This was the biggest annual rise on record.

June 2021 is the third consecutive month in which the growth rate of housing prices set a record, noted Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “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. June’s data are consistent with this hypothesis. 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.”