(Bloomberg)—U.S. home prices soared the most in 15 years, with low mortgage rates and a scant inventory of properties to buy fueling a tight housing market.
Nationally, the S&P CoreLogic Case-Shiller index of property values climbed 12% in February from a year earlier, the biggest jump since 2006. That followed an 11.2% gain in January.
Home prices in 20 U.S. cities jumped 11.9%, meanwhile, beating the median estimate of 11.8% in a Bloomberg survey of economists.
Historically low mortgage rates have been at the center of the pandemic housing rally, increasing buying power as Americans look to upgrade their properties. The average for a 30-year loan dropped to 2.97% in the most recent data, moving closer to the record low 2.65% set in January.
With inventory tight, especially in suburban markets, prices have jumped to record highs.
“These data remain consistent with the hypothesis that Covid has encouraged potential buyers to move from urban apartments to suburban homes,” according to the report.
Phoenix reported the biggest year-over-year gains among the 20 cities in February with a 17.4% increase. That was followed by San Diego at 17% and Seattle with a 15.4% increase.
Nineteen of the 20 cities reported higher price increases in the year ending February 2021 versus the year ending January 2021.
© 2021 Bloomberg L.P.