Lennar (LEN) - Get Lennar Corporation Class A Report and other homebuilders rose Tuesday after the S&P CoreLogic Case-Shiller Index found that home prices rose more than 14% on annual basis in April, the highest reading in more than 30 years.
Lennar was climbing 1.2%, while PulteGroup (PHM) - Get PulteGroup, Inc. Report climbed 2.6%, D.R. Horton (DHI) - Get D.R. Horton, Inc. Report was up 1.3% and KB Home (KBH) - Get KB Home Report rose 1.3%.
Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in April,
Phoenix led the way with a 22.3% year-over-year price increase, followed by San Diego with a 21.6% increase and Seattle with a 20.2% increase.
The 10-City Composite annual increase came in at 14.4%, up from 12.9% in the previous month. The 20-City Composite posted a 14.9% year-over-year gain, up from 13.4% in the previous month.
All 20 cities reported higher price increases in the year ending April compared with the year ending March.
"April's performance was truly extraordinary," Craig Lazzara, managing director and global head of index investment strategy at S&P DJI, said in a statement. "The 14.6% gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data."
Lazzara said the April results are consistent with an earlier belief that the strength in the U.S. housing market is being driven in part by reaction to the COVID-19 pandemic, as potential buyers move from urban apartments to suburban homes.
"This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years," he said. "Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing."
Lazzara said more time and data "will be required to analyze this question."
Also in June, KB Home reported fiscal second-quarter revenue that fell short of estimates.