U.S. home prices climbed in March at the strongest rate in nearly three year as a dwindling supply of houses for sale is causing prices to significantly outpace income growth.
The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index released Tuesday rose 5.9 percent over the past 12 months ended in March, the most since July 2014. Home values are increasing at more than double the pace of average hourly earnings, making it more difficult for many people to afford to buy a home.
“Over the last year, analysts suggested that one factor pushing prices higher was the unusually low inventory of homes for sale,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “People are staying in their homes longer rather than selling and trading up.
A steady job market has bulked up demand among many would-be buyers, but there are fewer properties on the market.
Sales listings have plummeted 9 percent over the past year to 1.93 million, according to the National Association of Realtors.
Home inventories have also fallen recently on Long Island. In April, the inventory of homes for sale fell by almost 10 percent from a year earlier in Nassau County, and by 17 percent in Suffolk, the Multiple Listing Service of Long Island reported this month.
Home prices rose 8 percent from a year earlier in Nassau, to a median price of $475,000, and 9 percent in Suffolk to $340,000.
The shortage of homes to buy has also caused prices to rise sharply in many other areas.
The largest annual gain was in Seattle, where prices have surged 12.3 percent. Portland, Oregon, recorded a 9.2 percent increase, while Dallas prices rose 8.6 percent.
Of the 20 cities in the index, the weakest gain was in New York City — an area where home prices are already high relative to median incomes. Home prices in New York City have risen 4.1 percent in the past year, still much higher than U.S. average hourly earnings, which have increased 2.5 percent over the past 12 months, according to the Bureau of Labor Statistics.
With Newsday Staff