A residential neighborhood in the San Francisco Bay Area.
U.S. Home prices rose at the fastest pace in seven years in January 2021, while the supply of homes fell to a new low.
The Case Shiller 20-city composite index (Case Shiller 20-city index) rose 11.1 percent year-over-year, up from 10.2 percent the previous month and the largest gain since March 2014, and the 10-city composite index rose 10.9 percent year-over-year, up from 9.9 percent the previous month, Foxbusiness reported. From December last year to January this year, the 10-city composite index and the 20-city composite index rose 0.8% and 0.9%, respectively.
Adjusted for seasonal factors, both indices rose 1.2 percent. In January, 19 of these 20 cities rose before seasonal adjustment and all 20 rose after seasonal adjustment.
Meanwhile, the S&P CoreLogic Case-Shiller National Home Price Index rose 11.2 percent in January, up from 10.4 percent the previous month, marking the highest annual home price growth rate since February 2006.
Phoenix (Phoenix) had the fastest home price growth for the 20th consecutive month, up 15.8 percent year-over-year, followed by Seattle (Seattle), up 14.3 percent, and San Diego (San Diego), up 14.2 percent. The city with the slowest home price growth was Las Vegas, although the 8.5% year-over-year increase was still impressive.
Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indexes, said in a statement, “January’s numbers remain consistent with the view that COVID (the Communist Party of China virus outbreak) is prompting potential buyers to move from city condos to suburban homes is consistent with the view.”
Lazzara noted that it is unclear whether this trend will abate as the outbreak is brought under control. Or whether the increased demand will be a permanent shift.
According to the latest data from the National Association of Realtors (NAR), there were 6.22 million manufactured home sales in February, down 6.6 percent on a seasonally adjusted annual basis. However, existing home sales still rose 9 percent in February compared to the same month last year.
At the end of February, the housing stock hit a record low of 1.03 million units, down 29.5 percent from a year earlier and below 1.46 million units, the largest annual decline since the National Association of Realtors began collecting housing stock data in 1982.
Mortgage rates, which have become relatively high, may slow home sales slightly in the coming months, but borrowing costs remain near historic lows. In the last week, the average rate on a 30-year fixed-rate mortgage rose to nearly 3.2%, the highest level since June and up from 3.1% the previous week. That’s still below the 3.5 percent rate before the Epidemic.
Home prices across the U.S. rose 12 percent from a year ago and 1 percent from a year ago, according to the Federal Housing Finance Agency’s Home Price Index released Tuesday (March 30). The Federal Housing Finance Agency reported that home prices in the mountains rose 14.8 percent, consistent with regional data reported by the Case Shiller Index.