U.S. home prices rose at a healthy clip in April, though the increase slowed a bit from the previous two months.
As The Associated Press reports, the Standard & Poor’s CoreLogic Case-Shiller 20-city home price index climbed 5.7% in April, after increases of 5.9% in March and February. Those gains were the highest in nearly three years.
Home prices are rising roughly twice as fast as average wages, a dynamic that may eventually stifle sales by thwarting would-be homeowners. Bidding wars among buyers competing for a limited supply of available homes are driving up costs. Low mortgage rates are also encouraging more Americans to buy homes.
“Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up,” David Blitzer, chairman of the index committee at S&P Dow Jones indices, says.
The number of homes available for sale nationwide has fallen 8.4% in the past year to just 1.96 million, according to the National Association of Realtors. That’s enough to last just four months at the current sales pace. A healthy market typically has a six months’ supply.
