The rise in U.S. housing prices has grown sharply in April for more than three decades as large homes need to cope with housing shortages.
The S&P Case-Shiller index of real estate prices, which affects nine U.S. shares, rose by 14.6% year-on-year in April, the figure showed Tuesday. This was followed by a jump of 13.3% per annum in March, and was “more than 30 years old,” according to the report.
Currently, the 20-city city, which covers major US regions including Dallas, Miami, New York and San Francisco, has risen 1.6% since last month and 14.9% year-on-year.
This is the largest annual increase since December 2005 and compared with expectations of 14.5% annual growth, according to financial analysts by Refinitiv.
Phoenix, San Diego, and Seattle have reported 20-year success in April.
“Apple’s performance was astounding,” said Craig Lazzara, executive director and global head of S&P Dow Jones Indices.
Although the spread has been due to the epidemic of domestic housing crisis, he said this could “represent a resurgence of purchases that would take place in the next few years”.
U.S. house prices soared last year as Americans took advantage of the low price of housing. Demand, combined with strong housing, went up in price to set standards. This was exacerbated earlier this year due to the high cost of timber.
The rise in house prices hinders first-time buyers, economists say, while some expect the demand for urban living to decrease due to natural disasters. A special report by the Conference Board on Tuesday revealed that the number of Americans planning to buy homes, cars and heavy equipment has risen this month.
While high home prices may bring more sellers to market, economists warn that these people – unless they sell second homes or vacations – will also need to find a place to live, which may be less problematic in terms of demand.
There are other signs that home security is starting to grow. The U.S. Department of Commerce last week said finding new homes sales rose by 15,000 in May to 330,000, up 5.8% from a year ago. This represents a 5.1-month availability on this trade, starting at 3.6 months in January.
“Past records in recent weeks suggest that rest in this red market could begin,” says Matthew Speakman, an economist at Zillow. “But the return to the right market remains a long way off, and there are few, if any, indications that appreciation for domestic prices will begin to decline soon.”
Coming out house prices attracted the attention of Federal Reserve officials.
This week Eric Rosengren, president of the Boston Federal Reserve, adauza Financial Times that the US will not be able to “enjoy the excess” in the housing market which could threaten economic stability. He also said that it is not uncommon for only consumers to participate in the Boston competition.
Some Fed officials, including Dallas Fed President Robert Kaplan, have urged the central bank to reconsider its contribution to the real estate market through its $ 40bn monthly purchase on corporate security returns.
Tuesday’s house prices could also boost inflation, says James Knightley, chief financial officer at ING. The initial rental that he pays to workers, as well as the corresponding rent of the owners – the amount of landlords who can count on to repair their homes – makes up one-third of the basket of property used to calculate the cost of utilities, he said.
“We anticipate that the relationship will work and we can expect the household appliances to change significantly in the coming months,” he said.
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