Eye On Housing
In December, national home prices (not seasonally adjusted) rose at the fastest pace in seven years, fueled by strong demand and low inventory. Among all 19 major markets, Seattle, Washington DC and Cleveland reported the largest home price appreciation.
The S&P CoreLogic Case-Shiller U.S. National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 16.4% in December, following an 18.9% increase in November. It marks the fifth consecutive month of double-digit growth in home prices. On a year-over-year basis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index posted a 10.4% annual gain in December, up from 9.5% in November. The December gain marks the highest annual rate of home price growth since January 2014.
Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 14.4% in December, following a 13.2% increase in November. On a year-over-year basis, the FHFA Home Price NSA Index rose by 11.4% in December, after an increase of 11.1% in November. It confirmed rapid growth in home prices for this month.
In addition to tracking national home price changes, S&P reported home price indexes across 19 metro areas in December (Detroit metro area data was missing in December 2020 because there are not a sufficient number of records for the month of December for Detroit).
In December, all 19 metro areas continued to show strong price gains and their annual growth rates ranged from 9.7% to 20.0%. Among all the 19 metro areas, ten metro areas exceeded the national average of 16.4%. Seattle led the way with a 20.0% increase, followed by Washington DC with a 19.8% increase and Cleveland with a 19.5% increase.
The scatter plot below lists the 19 major U.S. metropolitan areas’ annual growth rates in November 2020 and in December 2020. The X-axis presents the annual growth rates in November 2020; the Y-axis presents the annual growth rates in December 2020. Six of the 19 metro areas, the dots above the blue line, had an acceleration in home price growth and the rest 13 metro areas, located below the blue line, experienced the deceleration.
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