- Home price momentum gathered more speed in January 2021
- Home prices up +11.2%
2021 Home-Buying Season Strong
After picking up the pace of rising home prices in the second half of 2020, the S&P CoreLogic Case-Shiller Index indicated no lags coming in to 2021. In fact, the December–to-January index jumped to +11.2%, the strongest increase in home prices since 2005
Buyers Experiencing One of Most Competitive Markets Since pre-Great Recession
There was no traditional “slow season” in home buying activities during the winter months. Just the opposite, in fact.
Mortgage rates hit all-time lows in December which in turn carried home purchase momentum and increased demand for both first- and second-homes among Millennials and repeat buyers.
Even as mortgage rates began inching up and prices continued to climb +10% over last year, buyers kept buying.
Home Prices Reached Double-Digit Growth in January
In both the 10- and 20-city composite indexes analyzed by the CoreLogic Case-Shiller Index, up +10.9% and 11.1% respectively, home prices surged at the fastest pace since early 2014. The 10-city index is now +13% higher and 20-city index is +18% higher than previous peaks in both indices since 2006.
Price Growth Leader
For the 19thconsecutive month, Phoenix led the pack for the metro with the fastest home price growth with a +15.8% m/m jump in January. Seattle came in second with home price growth at +14.3% and San Diego slid into third with a +14.% m/m home price increase
Las Vegas and its +8.5% annual home price increase showed the slowest price growth in January. Home prices in Miami, Chicago and Las Vegas remain below their previous peaks while Denver (+75%) and Dallas (+67%) continue to see their home prices soar compared with previous peaks.
All Three Price Tiers See Home Price Increase
Home prices among the lower one-third of the price distribution experienced an increase of +12.8%, the strongest home price growth in January. Phoenix, Seattle, Boston and Tampa were strongest in this lowest-price tier. The average price growth among medium-tier priced homes was +10.% and home prices in the highest price tier came in at +10.8%
Two Concerns Amid Increasing Home Prices
Affordability and record-low inventory continue to be constant concerns in this environment of seemingly endless demand and rising prices. Certainly the constraints caused by both of these issues will likely slow competition and bridle, as CoreLogic wrote, “the full potential of home sales activity in 2021.”
Thanks to CoreLogic.
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