National Home Prices Increase 18.8% in 2021

home price increase sp cl 2021 index
home price increase year end '21
Craig Lazzara, Dow Jones Indices.

The S&P CoreLogic Case-Shiller Index for U.S. home prices shows an 18.8 percent increase for 2021, but with a general slowing in the rate of home price increases toward the latter half of the year. Month-over-month, December 2021 showed a 1.3 percent increase compared after seasonal adjustments compared with the same month the year prior.

In December, all 20 cities reported increases before and after seasonal adjustments, the report stated.

“This month’s report covers December 2021, and therefore brings our reporting on calendar 2021 to a close,” S&P Dow Jones Indices Managing Director Craig J. Lazzara said. “For the year, the National Composite Index recorded a gain of 18.8 percent. This is the highest calendar-year increase in 34 years of data, and substantially ahead of 2020’s 10.4 perce t gain.”

The 10-City Composite annual increase for 2021 came in at 17 percent, up from 16.9 percent in the previous month. The 20-City Composite posted an 18.6 percent year-over-year gain, up from 18.3 percent in the previous month. Phoenix, Tampa, and Miami reported the highest year-over-year gains among the 20 cities in December. Phoenix led the way with a 32.5 percent year-over-year price increase, followed by Tampa with a 29.4 percent increase and Miami with a 27.3 percent increase.

“We have noted that for the past several months, home prices have been rising at a very high, but decelerating rate. The deceleration paused in December, as year-over-year changes in all three composite indices were slightly ahead of their November levels,” Lazzara said. “December’s 18.8 percent gain for the National Composite is the fifth-highest reading in history.”

It has been suggested, Lazzara said, that the strength in the U.S. housing market is driven in part by a change in locational preferences as households react to the COVID pandemic.

“More data will be required to understand whether this demand surge simply represents an acceleration of purchases that would have occurred over the next several years rather than a more permanent secular change.,” he said. “In the short term, meanwhile, we should soon begin to see the impact of increasing mortgage rates on home prices.”

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