Home prices are rising at an unprecedented level across much of the United States. They are driven by low mortgage rates, a flight from a few big cities to medium-sized ones and suburbs because more people can work from home and would like a better quality of life. Additionally, the COVID-19 pandemic did little to affect the incomes of middle- and upper-class Americans.
Many cities have posted double-digit price increases compared to 2020. According to the most widely followed home price research, the S&P CoreLogic Case-Shiller Index, home prices in April across the United States rose 14.6%. This trend is several months old and has become even more pronounced.
According to Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI, “Housing prices accelerated their surge in April 2021.” He added, “April’s performance was truly extraordinary. The 14.6% gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data.”
The Case-Shiller research focuses particularly on data from the 10 and 20 largest American cities. Among the 20 largest cities, prices in Phoenix topped the list, as they were up 22.3% in April year over year. Two other cities posted an increase of over 20% for the same period. That was by 21.6% in San Diego and 20.2% in Seattle. Notably, the price increase was much more modest in America’s other largest coastal cities, which are metros many people have left. The price in New York City rose 13.5% in April year over year and by 15.1% in San Francisco.
Phoenix remains relatively affordable. Case-Shiller gave each of the 20 cities an index of 100 in January 2000 so that price increases for each city could be compared over time. In April, the Phoenix figure was 252. This compared to the highest city based on the index, which is Los Angeles at 339. The lowest number is Detroit’s 147.
Click here to see the 35 most expensive cities to move to.
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