U.S. home prices increased 1.1% in November compared with October and were up 8.2% compared with November 2019, according to CoreLogic’s home price index report.
It was the largest year-over-year increase since March 2014.
Currently, CoreLogic is forecasting that home price appreciation will continue to accelerate through the first quarter but will slow by the fourth quarter.
However, possible stimulus actions could help spur home buyer demand among low- and middle-income families and support stronger home price growth.
“The housing market performed remarkably well in 2020 despite the volatile economic state,” says Frank Martell, president and CEO of CoreLogic, in a statement. “While we can expect to see lingering effects of COVID-19 resurgences and subsequent shutdowns in the early months of 2021, vaccine distributions and stimulus actions should revitalize economic activity and keep home purchase demand and home price growth strong.”
“The demographic tailwind has arrived as Generation X and millennials drive housing demand,” adds Frank Nothaft, chief economist at CoreLogic. “Lower-priced home values increased about one and a half times faster than higher-priced home values in November, as first-time buyers tend to seek-out homes within the lower price ranges.”
Despite the rapid acceleration of national home price growth, local markets continue to vary. For instance, in Phoenix, where there is a severe shortage of for-sale homes, prices continued to surge, increasing 12.6% year-over-year in November.
Meanwhile, the New York-Jersey City-White Plains metro recorded a smaller-than-average annual increase of 3.2%, as residents continue to seek out more space in less densely populated areas.
At the state level, Idaho, Maine and Indiana experienced the strongest price growth in November, up 15.7%, 15.4% and 13.6%, respectively.