U.S. Home Prices Surge Most Since 2005, Fueled by Low Rates

(Bloomberg) -- U.S. home prices surged the most since the end of 2005 as a shortage of properties to buy fueled bidding wars.

Nationally, the S&P CoreLogic Case-Shiller index of property values climbed 13.2% in March, the biggest gain since December 2005. That came after a jump of 12% in February.

Home prices in 20 U.S. cities gained 13.3%, meanwhile, beating the median estimate in a Bloomberg survey of economists. It was the biggest jump since December 2013.

The real estate market has been surging for the past year as Americans seek properties in the suburbs, with low mortgage rates driving the rally. A dearth of available properties has also helped push up prices.

“These data are consistent with the hypothesis that Covid-19 has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig J. Lazzara, global head of index investment strategy at S&P Dow Jones Indices. “This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years.”

Phoenix (20%), San Diego (19.1%) and Seattle (18.3%) posted the biggest increases among the 20 cities tracked by Case-Shiller.