Home prices surge by most since 2006

Prices rose 12% year over year in February

U.S. home prices in February rose at their fastest pace in 15 years as the COVID-19 pandemic accelerated the urge to move from urban apartments to suburban homes. 

Home prices climbed 12% year over year in February, according to the national Case-Shiller index, making for the fastest increase since February 2006. Prices are now 29% above their 2006 peak. 

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"The housing market is running full steam ahead," said Selma Hepp, deputy chief economist at CoreLogic.  

The 20-City Composite rose 11.9% in February versus a year ago, up from 11.1% in the previous month. 

All 20 of the index’s cities saw percentage gains over last year, led by Phoenix (+17.4%), San Diego (+17%) and Seattle (+15.4%). The smallest gains were in Chicago (+8.6%) and Las Vegas (+9.1%). 

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Every region recorded double-digit percentage gains, paced by a 13% increase in the West and a 12.9% rise in the Southwest.

The price increases have been bolstered by continued signs of a strengthening U.S. economy, in addition to low mortgage rates and a shortage of homes available for sale.

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However, surging prices won’t last forever, cautions Hepp.  

"More for-sale inventories and a narrowing pool of potential buyers will likely slow the speeding train, providing a clearer vision of what’s ahead," she said. 

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