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Home prices hit the highest rate of annual growth since 2005 in March of this year, according to The Wall Street Journal (subscription).

The numbers: The average home price in major metro areas rose 13.2% on an annual basis in March, according to an S&P index. More data:

• “The Commerce Department said the median price of a new home sold in April was $372,400, up 20.1% from a year earlier, the strongest annual gain since 1988.”
• “The median sales price for existing homes rose 19.1% in April to $341,600, the National Association of Realtors said last week.”

The drivers: The supply of houses on the market declined 28% in the last year, as people flocked to buy houses during the pandemic. Meanwhile, labor shortages and high materials prices are hampering builders’ ability to increase construction. Experts expect the increases to continue as it will take some time for the supply of homes to get anywhere near the demand for them.