By Dhirendra Tripathi
Investing.com – Shares of home-building companies gained Tuesday as data for April showed that housing prices jumped the most in more than three decades.
Lennar Corporation (NYSE:LEN), U.S.’ largest home builder by revenue, rose 2% and so did PulteGroup Inc (NYSE:PHM). Toll Brothers Inc (NYSE:TOL) climbed 1.5%.
D.R. Horton Inc (SA:D1HI34), NVR Inc (NYSE:NVR) and Taylor Morrison (NYSE:TMHC) were up 1% each. Tri Pointe (NYSE:TPH) gained short of 1%.
Nationally, the S&P CoreLogic Case-Shiller index of property values climbed 14.6% from a year earlier, the biggest gain in data going back to 1988. That came after 13.2% increase in March, and was the 11th straight month that price gains accelerated.
Home prices in 20 U.S. cities jumped 14.9%, beating the median estimate in a survey of Bloomberg economists and was the biggest gain since 2005. Low mortgage rates and demand for properties in the suburbs have fueled the U.S. housing market for more than a year, with a shortage of homes to buy helping to push prices higher.
Many buyers are running into issues while looking for properties they can afford. Sales of previously owned homes in the U.S. fell for a fourth straight month in May, according to Bloomberg.
Still, home prices are expected to remain elevated. Builders cite high materials prices, supply shortages and a limited number of skilled workers as ongoing challenges in their race to complete new homes.