Home Prices in U.S. Cities Rise at Fastest Pace Since 2014
(Bloomberg) -- Home prices in 20 U.S. cities gained in November, as historically low mortgage rates continued to fuel the booming housing market.
The S&P CoreLogic Case-Shiller index of property values climbed 9.1% from a year earlier, beating the median estimate of 8.7% in a Bloomberg survey of economists. It was the biggest jump since May 2014 and followed an 8% gain in October.
Nationally, the Case-Shiller index gained 9.5% in November, also the most since 2014.
“The trend of accelerating home prices that began in June 2020 has now reached its sixth month with November’s emphatic report,” said Craig Lazzara, global head of index investment strategy at S&P Dow Jones Indices.
Historically low borrowing costs have fueled a housing boom in the U.S., despite the economic fallout from the pandemic. With Americans gobbling up homes in the suburbs, a scarce inventory of properties to purchase has met surging demand to drive up prices.
Mortgage rates for 30-year loans have below 3% since July. But there is concern that the increase in buying power is being eroded by the jump in housing prices, creating an affordability gap that could freeze some Americans out of the market.
Phoenix, Seattle and San Diego reported the highest home price gains in November, according to a statement on Tuesday. Data for Detroit were excluded because of pandemic-related reporting delays.
A separate report from the Federal Housing Finance Agency -- which derives its data from mortgages that conform to Fannie Mae and Freddie Mac limits -- reported that its price index rose 11% in November from a year ago, the most in data going back to 1992.
Home prices were up 1% compared with October, FHFA said. After peaking in September, the gains have eased in recent months.
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