US house prices increased in October in more than six years, as a pandemic-driven buying spree took the number of properties available for sale to record levels
WASHINGTON – House prices in the U.S. increased in October in more than six years, as a pandemic-driven buying wave took the number of properties available for sale to record levels.
This combination of strong demand and limited supply pushed home prices up 7.9% in October compared to 12 months ago, according to Tuesday’s 20-city S&P CoreLogic Case-Shiller home price index. This is the biggest annual increase since June 2014.
The coronavirus outbreak forced millions of Americans to work from home and restricted other activities, such as eating out, going to the movies or visiting fitness centers. This is driving more people to look for homes with more space for a home office, a bigger kitchen or space to exercise.
“The data for the past few months is consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, Managing Director of S&P Dow Jones Indices.
All 19 cities reported greater year-on-year price gains in October than in September, said Lazzara. Detroit was unable to fully report sales data for its homes due to delays related to a coronavirus block.
The biggest price gain was in Phoenix for the 17th consecutive month, where house prices increased 12.7% over the previous year. It was followed by Seattle with 11.7% and San Diego with 11.6%.
Home sales fell in November, according to the National Association of Realtors, after a steady increase in the previous five months. Even after the drop, sales were almost 26% higher last month compared to the previous year. Sales were also driven by low mortgage rates, which reflect moves by the Federal Reserve to keep its short-term reference rate at almost zero.
The number of homes for sale fell to 1.28 million in November, brokers said, long enough to last just 2.3 months at the current pace of sales. Both numbers are record-breaking.