US home prices rising 2 times faster than wages

WASHINGTON — U.S. home prices climbed in March at the strongest rate in nearly three year as a dwindling supply of houses for sale is causing prices to significantly outpace income growth.

The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index released Tuesday rose 5.9 per cent over the past 12 months ended in March, the most since July 2014. Home values are increasing at more than double the pace of average hourly earnings, making it more difficult for many people to afford to buy a home.

“Over the last year, analysts suggested that one factor pushing prices higher was the unusually low inventory of homes for sale,” said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “People are staying in their homes longer rather than selling and trading up.

A steady job market has bulked up demand among many would-be buyers, but there are fewer properties on the market. Sales listings have plummeted 9 per cent over the past year to 1.93 million, according to the National Association of Realtors. The shortage of homes to buy has caused prices to rise sharply in many metro areas.