Home price growth accelerated to a record high in July, +19.7% y/y.
Record Home Price Growth Fueled by Migration from Coastal Residents to Affordable Metros
According to the latest S&P CoreLogic Case-Shiller Index, home price growth hit a new record high of +19.7% y/y in July. On its monthly index, home price growth hit +1.62%, the fastest June-to-July rate of price growth since this data tracker was conceived.
Sources of Price Growth?
First of all, the Millennial demographic is coming-of-age to home buying. (According to Experian and Zillow, the prime home buying age is 34.)
Additionally, relocating move-up buyers coming from coastal markets have larger budgets to spend on houses in more affordable areas. These move-up buyers are financially able to outbid local residents.
And then there has been the influx of investors.
(Do not underestimate the role that remote working is playing in both migration patterns due to mobility opportunities and accelerating price growth.)
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Supply and Demand Imbalance
The affect of all that demand has dwindled supply. The result? Record-high price growth acceleration in July. CoreLogic 10- and 20-city composite indices were up +19.1% and +19.9%, respectively. This +19.1% price growth rate for the 10-city index was the fastest rate of price growth since 2004. The +19.9% price growth rate for the 20-city index was the fastest price acceleration ever and also mirrors the rapid price growth seen in smaller, more affordable metros as in-migration from coastal residents push prices to new highs. Compared with the market peak of 2006, the 10-city composite is now +26% higher and the 20-city composite price index is now 32% higher.
Prices in All Metros Up Double-Digits in July 2021
Phoenix, for the 25th month in a row, held steady in first place with the strongest home price growth, +32.4%, among the 20-city composite markets. In July 2021, Phoenix’s price acceleration was +23% higher than July 2020.
Take a look at year-over-year home price growth in all 20 cities:
- Phoenix – +32.4%
- San Diego – +27.8%
- Seattle – +25.5%
- Tampa – +24.4%
- Dallas – +23.7%
- Las Vegas – +22.4%
- Miami – +22.2%
- San Francisco – +22.0%
- Denver – +21.2%
- Charlotte -+10.9%
- Portland -+19.5%
- Los Angeles – +19.1%
- Boston – +18.7%
- Atlanta – +18.5%
- New York – +17.8%
- Cleveland-+16.2%
- Detroit – +16.1%
- Washington DC -+15.8%
- Minneapolis – +14.5%
- Chicago – +13.3%
Compared to Prices in the Prior Peak (2004-2009), Home Prices +44% in July 2021
Take a look at price comparisons between the prior peak of 2004-2009 and July 2021:
- Denver – +102%
- Dallas +94%
- Seattle – +79%
- Portland – +62%
- Charlotte – +56%
- San Francisco – +55%
- Boston – +52%
- San Diego – +42%
- Atlanta -+40%
- Los Angeles – +31%
- Minneapolis – +37%
- Cleveland – +28%
- Phoenix -+23%
- Detroit -+23%
- Tampa – +22%
- Washington DC-+13%
- New York – +12%
- Miami – +11%
- Las Vegas – +5%
- Chicago – 0%
Price Growth by Price Tier
Both the low- and high-price tiers experienced an annual +21.2% growth in prices. The middle-price tier y/y price growth came in at +20.7%. Competition from investors and increased demand seemed to have fueled low-tier price growth while heightened demand for higher-end homes fueled high-tier price growth. Note that high-tier price growth happened at the highest rate ever recorded by this data source.
Month-over-month price growth in the low-price tier was most pronounced in Miami (+2.6%, Las Vegas (+2.6%), Phoenix (+4%) and Atlanta (+2.8%).
Among the high-price tier, month-over-month price growth was led by Phoenix (+3.2%) followed by a +2.9% increase in Tampa and Las Vegas.
Thanks to S&P CoreLogic Case-Shiller Index.
