Housing

Home Prices Surge To Record

Douglas A. McIntyre

Published: June 2, 2024 6:25 am

According to the new S&P CoreLogic Case-Shiller Indices report, home prices surged to a record in March. Prices rose 6.5% compared to the same month the year before, taking the figure to an all-time high.

Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, commented, “Our National Index has reached new highs in six of the last 12 months. During that time, we’ve seen record stock market performance, with the S&P 500 hitting fresh all-time highs for 35 trading days in the past year.”

Denver led all cities with an increase of 11.1% over the same month last year. New York’s rose 9.2%, placing it in second place. Los Angeles and Cleveland were next, each up by 8.8%. Interestingly, Cleveland’s prices have risen by among the lowest amounts in the last two decades, while Los Angeles’s prices have soared more than most of the 20 cities tracked over that period. Home prices have collapsed in this city. 

Home prices have risen so quickly primarily because of a single reason: the 7% mortgage rate on 30-year fixed home loans. People who own homes have been reluctant to sell these because of the 3% mortgages many have gotten in the last decade. For them, buying a new home would be costly if they sell their current one. This brings inventory to extremely low levels.

Young people who usually enter the housing market in their 20s and 30s have been prevented from buying new homes because prices have become out of reach.