Home Prices See Fastest Increase in Nearly 15 Years
March 31, 2021
Home prices have seen the biggest annual gain since before the market crash, and now some economists are calling the pace alarming. Home prices nationally jumped 11.2% in January, according to the S&P CoreLogic Case-Shiller Index. That’s the fastest annual increase since 2006.
In January 2020, the annual increase was just 3.9%. The trend of accelerating price gains began in earnest last July, and each month since has seen the annual increase climb by a full percentage point or more.
The primary cause of the increase is record-high demand and record-low inventory. The pandemic drove some demand, as people sought to leave crowded cities for the relative isolation of the suburbs. However, demand is expected to subsist after the pandemic ends, especially as millennials enter their prime homebuying years.
Another factor is the historically low mortgage rates. Though they have risen slightly in recent weeks, they set more than a dozen record lows last year.