Phoenix, San Diego, Seattle lead record increase for U.S. home prices

Aug. 31 (UPI) -- Home prices in the United States increased during the month of June by their greatest leap in more than three decades of record-keeping, according to an industry gauge on Tuesday.

The S&P CoreLogic Case-Shiller National Home Price Index said prices in June were up 18.6% year-to-year -- which is the largest 12-month increase since the index began keeping track in 1987.

The month before, in May, the year-to-year increase was 16.8%.

The index covers all nine U.S. census divisions.

"June 2021 is the third consecutive month in which the growth rate of housing prices set a record," Craig Lazzara, S&P DJI managing director and global head of index investment strategy, said in a statement.

"The national composite index marked its 13th consecutive month of accelerating prices."

The 10-city composite showed an 18.5% price increase in June and the 20-city composite was up 19.1%.

"The last several months have been extraordinary not only in the level of price gains but in the consistency of gains across the country," Lazzara added. "In June, all 20 cities rose, and all 20 gained more in the 12 months ended in June than they had gained in the 12 months ended in May."

The report said all cities in the 20-city index except for Chicago are at record highs.

Phoenix led all cities with a 29.3% increase, followed by San Diego (27.1%) and Seattle (25%). Overall, the Southwest remained the hottest region (22.7%), followed closely by the West (22.6%).

"We have previously suggested that the strength in the U.S. housing market is being driven in part by the reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes," Lazzara said. "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."