Home Prices Surge To Record

By Douglas A. McIntyre Published Jun 2, 6:25AM EDT

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Home Prices Surge To Record — © Lane V. Erickson / Shutterstock.com

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.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.