U.S. home prices accelerated at a record pace for the third consecutive month in June as homebuyers bid up prices to overcome the hurdle of low inventory.
Home prices rose 18.6% year over year, the fastest on record, according to the national Case-Shiller index. Prices are now 41.3% above their 2006 peak.
"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 and global head of index investment strategy at S&P Dow Jones Indices.
Price gains in July quickened from June in every city within the 20-City Composite index which grew 19.1% from the same period last year.
Phoenix paced the gains with a 29.3% year-over-year price increase, followed by San Diego with a 27.1% gain and Seattle with a 25% rise. All cities within the index except for Chicago saw prices reach record levels.
However, analysts warn the record-setting price gains may be nearing an end as competition for homes wanes and more inventory hits the market.
"Going forward, home price growth may ease off but stay in the double digits through year-end," said CoreLogic deputy chief economist Selma Hepp.