U.S. home prices gained 5.5% in April from a year earlier as low mortgage rates and a shortage of listings boosted competition for properties and kept values growing even amid the COVID-19 pandemic.
The pace matched the annualized gain seen in April 2019, according to a report from the Federal Housing Finance Agency.
The inventory of homes on the market in April fell to the lowest level ever recorded for the month, according to Lawrence Yun, chief economist of the National Association of Realtors. A limited supply keeps prices high as buyers compete to get a deal.
“There’s a major bottleneck in inventory and a tremendous amount of buyer interest, which is supporting price growth,” Yun said.
April home sales fell to a seasonally adjusted 4.33 million annual pace, the slowest rate in a year and almost a million below the pace seen in March, according to NAR data.
Across the nine census divisions, the Mountain division that includes Colorado saw the strongest appreciation growth, with a 6.8% annual gain.
The East South Central region that includes Tennessee was next, with an annualized increase of 5.9%, followed by the East North Central region that includes Illinois, with a 5.8% gain, and the Pacific area that includes California, at 5.5%.
The slowest growth pace was in the Middle Atlantic region that includes Pennsylvania and New Jersey, with a gain of 5% from a year earlier.
The FHFA index is calculated using prices for single-family homes bought with mortgages backed by Fannie Mae and Freddie Mac. Because of this, it excludes cash transactions and sales of high-end homes bought with jumbo loans.
