U.S. home prices surged again in October as the housing market continues to boom in the wake of the COVID-19 recession.
The S&P CoreLogic Case-Shiller 20-city home price index, which came out today, climbed 18.4% in October from a year earlier. The gain marked a slight deceleration from a 19.1% year-over-year increase in September but was just short of what economists had been expecting, at 18.5%.
All 20 cities posted double-digit annual gains. The hottest markets were Phoenix (up 32.3%), Tampa (28.1%) and Miami (25.7%). Minneapolis and Chicago posted the smallest increases, 11.5% each.
The housing market has been strong thanks to rock-bottom mortgage rates, a limited supply of homes on the market and increased demand from consumers locked in last year by the COVID-19 pandemic. Many Americans have been looking to trade up from apartments to homes or to bigger houses.
It remains unclear if that shift is permanent or an aberration, said Craig Lazzara, managing director at S&P Dow Jones. “We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic,″ he said. “More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred over the next several years, or reflects a more permanent secular change.″
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