Home prices post record gains

Home prices in the key 20 metro markets watched by the S&P CoreLogic Case-Shiller index surged 19.1 percent in the year through June - that's the biggest annual price gain ever recorded by the survey.

The largest year-over-year gains were seen in Phoenix, San Diego and Seattle, according to the report released on Tuesday.

Home prices have continued to rise throughout the year as demand outstrips supply. Low interest rates and a desire to move to a bigger home or different location have been main factors driving the real estate market.

But the boom in housing prices has a downside, as it is adding to consumer angst over inflation, as consumers watch the costs of a wide-range of goods go up in recent months.

U.S. consumer confidence fell to a six-month low in August as higher inflation dampened the outlook for the economy.

Consumers are also worried about the resurgent health crisis.

The drop in consumer confidence comes just ahead of what could be a pivotal time for the economy as extra jobless benefits, which helped prop up consumer spending, expire next week.

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