US house price growth insisted in the penultimate month of 2020 at a level not seen for nearly seven years.
Standard & Poor’s said on Tuesday that its S&P CoreLogic Case-Shiller national house price index posted an annual gain of 9.5% in November, up from 8.4% in October. The last time the index reached this level was in February 2014. The 20-City Composite achieved an annual profit of 9.1%, compared to 8% the previous month. The national and 20-City beat estimates of 8.85% and 8.7% respectively, according to consensus drawn up by Bloomberg.
“The trend of accelerating house prices, which began in June 2020, has now reached its sixth month with the November report,” said Craig J. Lazzara, managing director and global head of the S&P Dow Jones Indices’ index investment strategy. said a press release. ‘As COVID – related constraints began to grip the economy last year, its impact on house prices was unclear. Price growth slowed in May and June before starting with a steady climb upwards. November’s report continues the acceleration in a particularly impressive way. ”
Phoenix led the 20-City Composite for the 18th consecutive month, with an annual profit of 13.8%, while Seattle and San Diego followed, with a year-on-year profit of 12.7% and 12, respectively. , 3%.
“Once again, the strength of the housing market has been broad: all 19 cities about which we have November data have risen, and all 19 have achieved more in the twelve months ending in November than they did in the twelve months ending in October,” he said. Lazzara said. .
‘A real secular move in the demand for housing’
House prices are still fueled by historically low interest rates, low inventory and increased activity due to the pent-up demand for COVID-19 closures and a migration to urban areas to the suburbs.
“Recent data is consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” Lazzara said. ‘It could be a real secular shift in the demand for housing, or it could simply be an acceleration of movements that would take place over the next few years anyway. Future data will be needed to address the demand. ”
‘The housing market has remained stronger than expected during the last months of 2020, despite increases in infection rates across the country. As mortgage lending rates gradually fall at the end of the year and buyers realize that the pandemic is far from over, the strong demand has not been exacerbated by the traditional seasonal slowdown, ‘said CoreLogic’s deputy chief economist Selma Hepp. a press release said before the results were announced. “And as we are uncertain about when social interaction will be safe again, homebuyers will continue to compete for fewer and fewer homes for sale, which will drive home prices higher.”
Total inventory was 1.07 million units at the end of December, down 16.4% from a month earlier and down 23% from a year ago, according to the NAR. Unsold stocks are now at a low of 1.9 months’ supply at the current rate, down from 2.3 months in November.
While the start of housing in December and the building of permits show that the construction of new single-family homes is taking place at the fastest pace since 2006, the increase is unlikely to keep up with the question of whether the already weakened supply will compensate.
Experts expect house prices to end the year on a high note and rise until 2021. According to the National Association of Realtors, the average house price in December was $ 309,800, an increase of 12.9% compared to December 2019, as prices rose in each region. The December national price increase is 106 straight months of year-on-year gains. And that, according to NAR, is the highest level ever for a December.
Amanda Fung is an editor at Yahoo Finance.
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