The Case-Shiller index follows other reports this month that show continued strength in residential real estate. Sales of new homes climbed in April to an annual pace of 454,000, an increase of 2.3% from March and the second-highest level in almost five years, the Commerce Department reported last week. The median selling price jumped 14.9% from a year earlier to a record $271,600.
Purchases of previously owned homes also climbed, to a 4.97 million pace, the highest level in more than three years, according to the National Association of Realtors. The median price rose 11%, the fifth consecutive month that property values advanced more than 10% year over year.
“Other housing market data reported in recent weeks confirm these strong trends,” David Blitzer, chairman of the S&P index committee, said in a statement. “At the same time, the larger than usual share of multifamily housing, a large number of homes still in some stage of foreclosure and buying- to-rent by investors suggest that the housing recovery is not complete.”
The average rate on a 30-year fixed mortgage was 3.59% in the week ended May 23, down from 3.78% a year earlier, according for data from Freddie Mac. The rate reached a record low of 3.31% in November.
The housing recovery is giving consumers more confidence to spend, said Laura Alber, president and chief executive officer of Williams-Sonoma. The San Francisco-based company reported an 8.6% increase in net revenue in the three months ended May 5.
“We’re not sure whether there’s truly a housing recovery that’s going to be sustainable yet, but we are seeing that they are spending money to redecorate,” Alber said on a May 23 earnings call. “Whether they’re moving or not, it’s time to get some new stuff in your home after a period when I think people didn’t feel comfortable spending money on their homes.”