In October, home prices in major U.S. cities posted the largest year-over-year increase in more than seven years.
The data show that the S&P/CS 20 Large Cities Quarterly Home Price Index rose 7.95% year-over-year in October, the largest increase since 2014, and rose 1.61% sequentially, the largest increase since April 2013. The U.S. S&P/CS 20 Large Cities Quarterly Home Price Index rose 1.61% in October from a year ago, compared with 1% expected and 1.27% previously. The U.S. S&P/CS 20 Large Cities Home Price Index for October was 7.95% year-over-year, versus 6.95% expected and 6.57% prior.
The data suggests that demand for home purchases remained strong, driven by low loan costs, while limited supply gave sellers more room to ask for prices. On the other hand, the lack of inventory and soaring home prices could also cool the growth momentum in the housing market and push some buyers out of the market.
Data released last week showed that new home sales fell to a five-month low in November, and second-home sales also fell as record-low supply limited demand.
The outbreak of the new coronavirus has forced millions of Americans to work from home and cut back on other activities such as eating out, going to the movies or going to the gym. That has led more people to look for homes with more home offices, larger kitchens or exercise space.
Craig Lazzara, managing director of S&P Dow Jones Indices, said, “The data over the past few months show that the new crowns are encouraging potential buyers to move from urban apartments to suburban homes.”
In October, prices increased in all 19 cities from September, he said. Detroit was unable to fully report its home sales data because of delays associated with the New Crown virus embargo.
Among the 19 largest cities, the largest price increase was in Phoenix, which rose for the 17th consecutive month, with prices up 12.7 percent from a year ago. It was followed by Seattle (11.7 percent) and San Diego (11.6 percent).
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