Home prices just keep rising across the U.S.
The S&P/Case Shiller index of home prices in 20 metropolitan areas released Tuesday rose more than 13% on a yearly basis in March.
That’s the biggest annual price increase in more than 7 years, and it was higher than economists had expected. And it’s an acceleration from the 12% recorded in February.
Price increases were steepest in Phoenix, Arizona -- up 20% over last year. San Diego, California, and Seattle, Washington followed closely behind.
An acute shortage of homes for sale, coupled with strong demand for bigger accommodations as people work and study from home, have driven prices to a record high. But that tight supply is threatening to slow the housing momentum. On Tuesday, the Commerce Department reported that new home sales dropped 5.9% last month.
Economists don’t believe another housing bubble is developing. They note that a mismatch between supply and demand is behind the surge, not poor lending practices that triggered the financial crisis in 2008.