Home prices jump 12%, new home sales hit a five year high
CNNMoney
The housing recovery continues to pick up steam, as home prices jumped in April, and new home sales hit a five year high in May.
The S&P/Case-Shiller home price index was up 12.1% in April, compared to a year ago, in the 20 top real estate markets across the nation. That was the biggest annual jump in prices in seven years. Prices climbed 2.5% from March, posting the biggest one-month rise in the 12-year history of the index.
New homes were sold at an annual pace of 476,000 in May, according to a separate government report. That’s the best reading since July 2008, just before the global financial meltdown slashed homebuyers’ access to credit. The pace of sales was up 2.1% from April, and up 29% from a year ago.
The median price of a new home sold in May was $263,900, down 3.1% from April, but those month-over-month comparisons are often volatile. Even with the monthly decline, new home prices were up 10.3% from a year earlier
A drop in foreclosures, coupled with a tight supply of homes for sale and mortgage rates that hit record lows, have fueled the rebound in housing over the last 11 months.
The rapid rise in home prices that’s fueling the housing recovery could actually help derail it, as it makes purchases more difficult for potential buyers,” stressed Jim Belfiore of Belfiore Consulting. Even the National Association of Realtors warned last week that “home price growth is too fast,” and said that the market needs significantly more home building and better access to credit for buyers.
