Pricier homes, higher inflation?

It was another sign of a trend that is putting home ownership out of reach for many — and may contribute to higher inflation: U.S. home prices shot higher in April from a year earlier by a record amount.

The S&P CoreLogic Case-Shiller national home price index jumped 14.6% in the 12 months that ended in April, up from a 13.3% year-over-year increase in March. April’s 12-month jump was the sharpest in more than 30 years of data.

Just before the pandemic struck in March of last year, home prices had been rising at about a 4.5% annual pace.

The spike has been fueled by a surge in demand from Americans seeking more space. The Federal Reserve’s low interest-rate policies have kept borrowing costs low. And the supply of available homes has dropped 20% from the previous year, in part because many current owners have been reluctant to open their homes during the pandemic.

Home prices haven’t yet contributed much to higher consumer prices. But over time, costlier home prices and rents could trigger a sustained bout of high inflation.