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Home-price growth climbed to a record high in April, as buyers competed for a limited number of homes for sale.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 14.6% in the year that ended in April, up from an 13.3% annual rate the prior month. April marked the highest annual rate of price growth since the index began in 1987.
Home prices have surged in recent months due to low mortgage-interest rates, which have spurred strong demand, and a continued shortage of homes for sale. Many homes are getting multiple offers and selling above asking price. The home-price surge is widespread around the U.S., affecting buyers and sellers in big cities, suburbs and small towns.
The median existing-home sales price in May rose almost 24% from a year earlier, topping $350,000 for the first time, the National Association of Realtors said earlier this month.
While the pace of price gains is now faster than during the housing boom in the early 2000s, this market is less prone to a downturn, economists say. Ultra-low mortgage interest rates mean that the typical home buyer’s monthly payment hasn’t risen as rapidly as the typical house price.
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