House price growth skyrockets in late 2020 – fastest pace in 8 years

House price growth in the U.S. accelerated in the final month of 2020, the fastest pace in eight years. The results round out what was a record year for the housing market despite the COVID-19 pandemic.

Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 10.4% annual gain in December, down from 9.5% in November, the fastest growth rate since 2013. The composed of 20 cities registered an annual gain of 10.1%. , compared to 9.2% the previous month, beating estimates of a 9.90% year-on-year gain, according to the consensus compiled by Bloomberg.

“House prices ended 2020 with double-digit gains. The accelerating price trend that began in June 2020 has now reached its seventh month, ”said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a press release. He noted that December’s annual profit is within the top decile of all its reports, dating back more than 30 years.

“Market strength continues to be broad-based: 18 of the 19 cities for which we have December data increased, and 18 cities gained more in the 12 months ending in December than they had gained in the 12 months ending in December. November, “Lazzara said.

Once again, Phoenix led the 20-city composite for the 19th consecutive month, with an annual gain of 14.4%. Seattle and San Diego continued to post a year-on-year increase of 13.6% and 13%, respectively.

Last year, home prices slowed in May and June due to the COVID-19 lockdown, but that was quickly reversed in the summer as historically low interest rates and pent-up demand fueled real estate activity.

“Persistent buyer demand amid a very tight supply real estate market has undoubtedly pushed home prices to new highs in 2020. The continued drop in mortgage rates to new all-time lows, particularly in December , has also helped expand the affordability box for some buyers and allowed them to bid higher prices than they would have been able to if rates were higher, which also further accelerates price growth, “said the CoreLogic Deputy Chief Economist Selma Hepp in a statement before the results. “Looking ahead to 2021, the pressure on home prices will likely remain strong until mortgage rates rise or more homes become available for sale.”

Last week, the National Association of Realtors reported that the median sales price of an existing home increased 14.1% to $ 303,900 in January from the same period last year. He also said that the number of homes for sale hit a record low in January.

“The housing market continues to be well supported by low interest rates, tight supply and a shift in demand to lower-cost suburbs and cities where homeownership is more affordable,” Nomura said in a note. research before the results. “This should keep the pressure on house prices.”

Amanda Fung is an editor at Yahoo Finance.

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