Home prices in June posted the largest annual gain since 1987

That’s the biggest increase on record for the index, which began tracking home prices in 1987, surpassing May’s year-over-year increase of 16.8%.

A more focused look at 20 metro areas shows an increase of 19.1%, with Phoenix, San Diego, and Seattle posting the biggest gains. Phoenix saw a 29.3% year-over-year increase, while San Diego was up 27.1%, and Seattle 25%.

Home prices in all 20 cities tracked in that particular study are at all-time highs, with the exception of Chicago.

“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,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI (Dow Jones Indices) in a statement.

“This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years,” Lazzara continued. “Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing.”

Year to date, home prices nationwide are up 11.25%. The Case-Shiller study is seen as a good measure of housing prices, as it measures repeat sales of similar homes.

The surge in home prices has also been, in part, the result of restricted supply. More homes are coming on the market now, and sales are starting to cool. The “pending home sales index,” a forward-looking indicator of home sales based on contract signings, slipped 1.8% last month to its lowest level since April, according to the National Association of Realtors.

Mortgage rates, though, are still hovering near historic lows, which should keep demand strong, even if it’s not at the frenetic levels of earlier this year.