U.S. home prices jumped in November at the fastest pace in more than six years, fueled by demand for more living space as Americans stick closer to home during the pandemic.
Home prices soared 9.1% in November compared with 12 months ago, according to Tuesday’s report on the S&P CoreLogic Case-Shiller 20-city home price index. That is the largest increase since May 2014.
Low borrowing costs are also contributing to rising home sales, which have sharply reduced the number of dwellings available. The limited inventory of homes is pushing up home prices. Sales of existing homes rose in December and home sales for all of 2020 rose to the highest level in 14 years.
Phoenix posted the largest price gain in November from a year earlier for the 18th straight month, with a 13.8% increase. Seattle’s 12.7% gain was the second-highest, followed by San Diego at 12.3%.
All 19 cities reported larger year-over-year price gains in November than in October. Detroit wasn’t able to fully report its home sales data because of delays related to a coronavirus lockdown.
Home sales may slow in the coming months, consistent with declining sales in the winter, but are expected to remain elevated. The number of people who signed contracts to purchase homes fell in November compared with October, but was at a record high for November. Contract signings are usually followed by a completed sale within two months.