According to the Case-Shiller indices, home prices in America’s 20 largest cities have exploded at 19.08% YoY in June up from 17.14% in May, beating expectations of 18.6%, and the highest pace on record even surpassing the housing bubble days of 2005-2006.

The price in Phoenix is now up almost 30%, followed by San Diego, Seattle, San Fran, Tampa, Dallas, Miami all posting 20% price increases. Meanwhile, Charlotte, Cleveland, Dallas, Denver, and Seattle all record their all-time highest 12-month gains.

While there was a modest trace of a slowdown in this insane bubble, as the 20-city SA index rose 1.77% m/m in June after rising 1.81% the prior month, the double digit gains will continue well into 20% Y/Y territory. Phoenix, San Diego, Seattle reported highest year-over-year gains among 20 cities surveyed.

All cities that make up the composite saw home prices appreciate at double digits, just a little higher than The Fed’s 2% "goal".

But, on a national scale, it gets even crazier – or worse for anyone wanting to buy a house: Case-Shiller’s National Home Price Index rose 18.61% YoY in June, up from 16.78% and the fastest pace of home price inflation on record (back to 1988)

The National home price index rose 1.83% m/m in June after rising 1.81% the prior month.

“June 2021 is the third consecutive month in which the growth rate of housing prices set a record", said Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI.

“June’s 18.6% price gain for the National Composite is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. This month, Boston joined Charlotte, Cleveland, Dallas, Denver, and Seattle in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quartile of historical performance; in 19 cities, price gains were in top decile."

“The National Composite Index marked its thirteenth consecutive month of accelerating prices with an 18.6% gain from year-ago levels, up from 16.8% in May and 14.8% in April. This acceleration is also reflected in the 10- and 20-City Composites (up 18.5% and 19.1%, respectively). The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country. In June, all 20 cities rose, and all 20 gained more in the 12 months ended in June than they had gained in the 12 months ended in May. Home prices in 19 of our 20 cities (all but Chicago) now stand at all-time highs, as do the National Composite and both the 10- and 20-City indices."

“We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. June’s data are consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question."

Meanwhile, the question for Jay Powell is – explain how this is "transitory"?

“The forces that have propelled home price growth to new highs over the past year remain in place and are offering little evidence of abating,” Matthew Speakman, and economist at Zillow Group Inc., said in a statement.

“The number of available homes for sale remains historically small, particularly given the elevated demand for housing.”