Housing prices off to races, set a record in June

Biggest rise seen in Phoenix with 29.3% increase in year

WASHINGTON — U.S. home prices jumped by a record amount in June as homebuyers competed for a limited supply of available houses, the latest evidence that the housing market remains red-hot.

The S&P CoreLogic CaseShiller 20-city home price index soared 19.1% in June compared with a year earlier, the largest increase on records dating back to 2000. The annual price gains in June were higher in all 20 cities than they were in May. Prices are now at record highs in 19 of the 20 cities, with the exception of Chicago.

“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” said Craig Lazzara, managing director of index investment strategy at S&P Dow Jones Indices, which released the report Tuesday.

Prices rose in June by the most in Phoenix, where they soared 29.3% compared with a year earlier, followed by San Diego, with a 27.1% increase, and Seattle, at 25%.

The covid-19 pandemic has driven many Americans to seek homes in suburban areas that provide more space and are not as congested as apartments in big cities. Yet many other homeowners have been reluctant to sell during the pandemic, and the construction of new homes has foundered amid shortages of materials, land and labor.

That left just 1.32 million existing homes for sale in July, down 12% from a year earlier. Yet there are signs that the high prices are encouraging more people to sell, as the number of available homes rose in July compared with the previous month.

Another challenge for wouldbe homebuyers is competition from investors, including some Wall Street firms, purchasing single-family homes for rent. Nearly a quarter of all existing home sales in July were all-cash sales, up from 16% a year earlier.

The median price of an existing home sold in July climbed 17.8% from a year ago to $359,900, near the all-time high of $363,300 set in June, a Commerce Department report showed last week.

There are signs that the high prices are cooling sales a bit. Sales of existing homes rose 1.5% in July from a year earlier. That’s a much slower pace than the previous month.

The number of contracts signed to buy homes, a leading indicator of final sales, fell for two straight months.

An index of pending home sales decreased 1.8% in July from the month before to 110.7, a three-month low, the National Association of Realtors reported last week. An index of 100 is equal to the level of contract activity in 2001.

Compared with a year earlier, contract signings were down 9.5% on an unadjusted basis.

Sales of new homes rose 1% in July after a string of declines as prices soared.

July sales reached a seasonally adjusted annual rate of 708,000, the Commerce Department reported Tuesday.