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, jumped 14.9 percent y-o-y in April, following a revised 13.4 percent y-o-y climb in March (originally a 13.3 percent y-o-y surge). This was the biggest annual gain in house prices since December 2005.

Economists had expected a climb of 14.5 percent y-o-y.

Phoenix (+22.3 percent y-o-y), San Diego (+21.6 percent y-o-y) and Seattle (+20.2 percent y-o-y) recorded the highest y-o-y advances among the 20 cities in April. Overall, all 20 cities reported greater price gains in the year ending April 2021 versus the year ending March 2021.

Meanwhile, the S&P/Case-Shiller U.S. National Home Price Index, which measures all nine U.S. census divisions, climbed 14.6 percent y-o-y in April, following a 13.3 percent y-o-y jump in the previous month. 

“Housing prices accelerated their surge in April 2021,” noted Craig 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. April’s data continue to be 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.”