U.S. home prices in March posted their biggest annual increase in more than 15 years as the COVID-19 pandemic sped up the flight from city centers to the suburbs, causing demand to outstrip an already tight supply.
Home prices rose 13.2% year over year in March, according to the national Case-Shiller index, making for the largest increase since December 2005. Prices are now 32% above their 2006 peak.
"Massive home buying demand shows no signs of abating despite some rise in mortgage rates and concerns of overheated home price growth," said CoreLogic deputy chief economist Selma Hepp. "At the same time, hopes that new listings would proliferate as mass vaccinations encourage baby boomers to list their homes is showing little signs of taking place."
The 20-city composite jumped 13% compared to a year ago, up from a 12% gain the previous month. All 20 of the cities in the index reported higher prices in March than in February with Phoenix (+20%), San Diego (+19.1%) and Seattle (+18.3%) continuing to see the biggest gains. Chicago (+9%) was the only city to see a single-digit increase.
Every region posted double-digit gains, led by the West (+15.1%) and the Southwest (+14.8%).