U.S. home costs surged again in October as the housing market keeps on blasting directly following last year’s Covid downturn.
The S&P CoreLogic Case-Shiller 20-city home price index, out Tuesday, climbed 18.4 percent in October from a year sooner. The addition denoted a slight deceleration from a 19.1 percent year-over-year expansion in September yet was about in accordance with what market analysts had been anticipating.
Every one of the 20 cities double-digit annual gains. The hottest markets were Phoenix (up 32.3 percent), Tampa (28.1 percent) and Miami (25.7 percent). Minneapolis and Chicago posted the smallest increments, 11.5 percent each.
The housing market has been solid because of rock-bottom mortgage rates, a restricted supply of homes available, and repressed demand from customers secured last year by the pandemic. Numerous Americans, tired on being cooped up at home during the pandemic, are hoping to trade up from apartments to homes or to greater houses.
“Home price growth will slow further in the year ahead, but continue to go up,″ said Danielle Hale, chief economist at Realtor.com. “As housing costs eat up a larger share of home purchaser’s paychecks, buyers will get creative. Many will take advantage of ongoing workplace flexibility to move to the suburbs where despite home price gains, many can still find a lower price per square foot than nearby cities.″
It stays unclear assuming that shift is extremely durable or a variation, said Craig Lazzara, managing director at S&P Dow Jones Indices.
“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,” Lazzara 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.”
Last week, mortgage rates fell — to 3.05 percent for the benchmark 30-year, fixed-rate and 2.66 percent for the 15-year fixed-rate home loan. The persistently low rates signal that credit markets show up more worried about the omicron variant discouraging economic development than about the highest inflation rates in almost 40 years.
The National Association of Realtors announced last week that sales of recently involved homes rose for the third consecutive month in November to a seasonally changed annual rate of 6.46 million.
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