According to the S&P Case-Shiller survey of housing prices, year-over-year increases in national prices (as of January 30, 2018) has been 5% or more over the past 16 months. The 20-City house price index has climbed at this same fast pace over the last 28 months.

Why is housing inflation so much faster than general inflation? The answer seems rather obvious, since the construction of new homes in the U.S. is still at an unusually low level.

As the S&P media release noted, since 2010 the construction of single family homes was very slow and averaged only 632,000 annually. This pace of new construction is considerably lower than the slightly more than one million annually from 1959 to 2000 and 1.5 million homes during the 2001-2006 boom years.

As of November 2017, U.S. national house prices rose at a 6.2% annual gain in November 2017. Disaggregating the data into a 10-City and 20-City grouping, the reported year-over-year increase in house prices was 6.1% and 6.4%, respectively.