Home prices climb in April; 7 cities set new records

U.S. home prices climbed to new heights in April, with seven cities — including San Francisco — setting record highs.

The Standard & Poor’s/Case-Shiller 20-city home price index increased 5.4% in April compared with a year earlier, just a tick down from the 5.5% year-over-year gain in March.

Home values are now just 9.6% below their peak of nearly a decade ago, according to the report released Tuesday.

Shrinking inventories of homes for sale have boosted prices, while a healthy job market and historically low mortgage rates have kept demand from potential buyers strong during the spring months associated with the highest volume of sales.

The number of listings has fallen 5.7% from a year ago, the National Assn. of Realtors said last week.

Home prices rose in all 20 major housing markets, with Boston; Charlotte, N.C.; Denver; Dallas; Portland, Ore.; San Francisco; and Seattle reaching record highs. There were double-digit annual increases in Portland and Seattle.

Overall home ownership rates have dropped near a 48-year low in the aftermath of the housing bust that began in 2007. But sales have improved as the broader economy has slowly healed.

Sales of existing homes improved 1.8% last month to a seasonally adjusted annual rate of 5.53 million, the best pace since February 2007, according to the Realtors group.

Providing the foundation for much of that growth has been a solid 4.7% unemployment rate that points to a stable period for workers.

Rising prices have also been tempered by low mortgage rates that are holding monthly ownership costs in check.

Mortgage buyer Freddie Mac said the 30-year fixed-rate mortgage averaged 3.56% last week. That figure is down from 4.02% a year ago and the long-term average of 6%.