U.S. home prices increased 1.4% on an adjusted basis in November compared with October and were up 9.5% compared with November 2019, according to the S&P CoreLogic Case-Shiller home price index.
The index’s 10-city and 20-city composites, measuring home price appreciation in the largest U.S. metros, each posted an adjusted increase of 1.4% compared with October.
Year-over-year, the 10-city composite was up 8.8% while the 20-city composite was up 9.1%.
Phoenix, Seattle and San Diego continued see the highest year-over-year gains (Detroit is currently not reporting data due to the pandemic).
On an unadjusted basis, home prices were 1.1% up month-over-month.
“The trend of accelerating home prices that began in June 2020 has now reached its sixth month with November’s emphatic report,” says Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a statement.
Low mortgage rates, strong demand for single-family homes due to the pandemic, and lack of inventory have combined to rapidly drive up home prices.
“As COVID-related restrictions began to grip the economy last spring, their effect on housing prices was unclear,” Lazzara says. “Price growth decelerated in May and June before beginning a steady climb upward. November’s report continues that acceleration in a particularly impressive manner.
“Recent data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” Lazzara says. “This may represent a true secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway. Future data will be required to address that question.”
In a statement, Austin Niemiec, executive vice president for Rocket Pro TPO, says “as home prices continue to increase at a fast rate, we are seeing record low mortgage rates offset the gains, keeping housing affordable. With demand remaining elevated and rates at all-time lows, mortgage brokers should keep focusing on purchase even as we head into the winter months.”