US house price growth accelerated to its highest level in more than six years in October.
Standard & Poor’s said on Tuesday that its S&P CoreLogic Case-Shiller national house price index posted an annual gain of 8.4% in October, up from 7% in September. The growth rate is the highest level since March 2014. The 20-City Composite posted an annual profit of 7.9%, up from 6.6% the previous month, according to analysts’ estimates of 6.95%, according to Bloomberg.
‘We have previously noted that a trend of accelerated increases in the National Composite Index started in August 2019, but this was interrupted in May and June as COVID-related constraints slightly slowed the price increases. Since June, our monthly readings have shown increasing growth in house prices, and the October results highlight the trend with emphasis, “said Craig J. Lazzara, Managing Director and Global Head of S&P Dow Jones Indices Index Investment Strategy, in a press release. said.
Phoenix led the 20-City Composite again for the 17th consecutive month. annual increase of 12.7%. Seattle and San Diego followed, with an annual increase of 11.7% and 11.6%, respectively.
“Once again, the strength of the housing market has been broad: all 19 cities for which we have October data have risen, and all 19 in the twelve months ended in October received more than they achieved in the twelve months ended in September,” said Lazzara. .
Historically low mortgage interest rates, a shortage of homes for sale and the pent-up demand for a fixed housing market due to COVID-19 closures have contributed to a hot housing market since the spring.
“Home prices tend to rise faster, as lower mortgage rates enable more people to buy homes and allow more home buyers to buy larger and more expensive homes,” Wells Fargo wrote in a recent research note.
Mortgage interest rates continued to reach record lows in 2020. Last week, the interest rate on the fixed-rate mortgage for 30 years (the most common home loan) fell to 2.66% – according to Freddie, it dropped to a new low for the 16th time. Mac.
According to the National Association of Realtors’ (NAR) top real estate forecast, industrial experts will rise by 8% in 2021 and the average house price will rise by 8% in 2021. In November, the average house price rose 14.6% to $ 310,800 from the same month a year ago, according to the NAR nearly nine years of monthly annual increases.
“Despite the turbulent economic year, house prices soared in 2020 and are about 25% higher than the previous peak reached in the summer of 2006. As recent indicators of home purchases indicate, 2021 will begin with a sustained growth in home prices, which is likely to continue throughout the year, ”CoreLogic’s deputy chief economist Selma Hepp said in a statement before the result. “The robust underlying fundamentals that supported the remarkable housing market in 2020 will continue to support the market in the coming years.”
“Affordable housing, which has benefited greatly from falling mortgage rates, is now being contested due to record high house prices,” Lawrence Yun, chief economist at NAR, said in a press release. “It could hurt potential consumers, especially first-time buyers.”
Amanda Fung is an editor at Yahoo Finance.
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