Home-price growth began accelerating in July, a sign that the slowdown in home prices caused by the coronavirus pandemic may be reversing.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 4.8% in the year ending in July. On a monthly basis, prices rose 0.8 percentage points from June to July, after staying flat during the previous month.
Meanwhile, sales of existing homes have surged, rising 10.5% on an annual basis in August, according to the National Association of Realtors. That included a 44% increase in the sales of homes costing more than $1 million.
Home sales during the pandemic have been boosted by more families deciding to buy single-family homes where they can more comfortably work from home and have their children do remote learning. Their purchases have been aided by historically low mortgage interest rates.
“With buyer demand showing no signs of a slow down, as well as limited inventory, more price increases are inevitably on the horizon,” said Danielle Hale, chief economist at Realtor.com. News Corp, parent of The Wall Street Journal, operates Realtor.com.
The Case-Shiller 10-city index gained 3.3% over the year ended in July, compared with a 2.8% annual increase in June. The 20-city index rose 3.9%, after an annual gain of 3.5% in June.
Seattle, Phoenix and Charlotte posted the highest price gains of all major U.S. cities. “Prices were particularly strong in the Southeast and West regions, and comparatively weak in the Midwest and Northeast,” said Craig Lazzara, a managing director at S&P Dow Jones Indices.
A separate measure of home sales price growth by the Federal Housing Finance Agency found that prices rose 1.0% in July from June and rose 6.5% on an annual basis.