The latest results of the S&P CoreLogic Case-Shiller home price indices confirmed what many in the housing industry have seen firsthand: prices are skyrocketing.
According to the National Composite Index, prices in November vaulted 9.5% year over year, up from 8.4% in October and the highest annual pace of increase since February 2014. November growth rates for the 10- and 20-City Composite Indices, which were up 8.8% and 9.1% year over year, respectively, were also higher than in October.
“The trend of accelerating home prices that began in June 2020 has now reached its sixth month with November’s emphatic report,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
“The housing market continued to hold stronger than expected throughout the last months of 2020 and despite increases in infection rates across the country,” concurred Selma Hepp, deputy chief economist for CoreLogic. “With mortgage rates steadily falling through the end of the year and buyers realizing that the pandemic is still far from over, robust demand was not fazed by traditional seasonal slowdown.”
Month to month, the index slowed a bit from October’s increase, but still grew 1.1% from the previous month. The national index is now 26% above the zenith reached during before the Great Recession, with many metros also seeing prices far above their previous peaks.
“The housing market’s strength was once again broadly-based: all 19 cities for which we have November data rose, and all 19 gained more in the 12 months ended November than they had gained in the 12 months ended in October,” Lazzara observed.
Data continues to be unavailable for Detroit due to delays caused by the COVID-19 pandemic. Phoenix, Seattle and San Diego continue to lead cities in year-over-year price gains, seeing annual increases of 13.8%, 12.7% and 12.3%, respectively.
Price growth was strongest in the West (up 10.1%) and Southwest (9.7%), with even “the historically lagging Northeast (9.3%) also turning in an impressive month,” Lazzara noted.
Hepp added that CoreLogic’s data suggests that market conditions support even more price growth through the opening months of the new year.
“According to [the] CoreLogic Buyer/Seller Market Indicator, which measures the ratio between sold price and list price, buyer competition reached a new peak nationally in October and November when the ratio climbed to 0.996 – the highest level since 2008, when the data series began,” Hepp said. “The high Buyer/Seller Market Indicator suggests home sellers were generally getting their asking price.
“With buyer demand continuing to outpace the previous year’s levels amid historically lowest inventory of for-sale homes, the pressure on home prices is going to fuel home price growth in the first half of 2021.”