US home prices rose sharply in September, another sign that the housing market is booming after last year’s coronavirus recession.
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S&P CoreLogic Case-Shiller 20-city home values climbed 19.1 percent in September from a year earlier. Strong price gains marked a slowdown from August’s 19.6 percent year-on-year growth. Nevertheless, September prices in all 20 cities set new records.
Phoenix was the nation’s hottest market, registering a 33.1 percent price increase. This was followed by Tampa (where prices rose 27.7 percent) and Miami (25.2 percent). All 20 cities registered double-digit growth. The smallest gains were in Chicago (11.8 percent) and Minneapolis (12.8 percent).
The housing market has been consolidating, thanks to rock-bottom mortgage rates, a limited supply of homes on the market and pent-up demand from consumers off the pandemic in the past year.
“Housing prices continued to show significant potential in September, although the pace of price increases declined slightly,” said Craig J. Lazzara, managing director at the S&P Dow Jones Index. He said: “We have previously suggested that strength in the US housing market is being driven by the homes’ response to the COVID pandemic, as potential buyers move from urban apartments to suburban homes.”
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Last week, the National Association of Realtors reported that sales of previously occupied homes rose 0.8 percent last month at a seasonally adjusted annual rate of 63 million, the strongest annual pace since January. The Commerce Department reported last week that new home prices edged up a disappointing 0.4% last month as median prices rose nearly 18 percent from a year earlier to a record $407,700.
“Most indicators suggest price increases have continued at a slightly slower pace, albeit at a higher rate, amid tight supply conditions and a structural shift in demand from single-family, suburban homes driven by the pandemic,” contingency macro Advisors said in a research report.