(The Center Square) – An index that tracks home prices across the U.S. climbed 18.8% last year – the highest in 34 years – with the biggest gains coming in southern and southwest cities.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported an 18.8% annual gain in December. The index is designed to track the price path of typical single-family homes located in 20 metropolitan areas.
“This is the highest calendar year increase in 34 years of data, and substantially ahead of 2020’s 10.4% gain,” said Craig Lazzara, managing director at S&P Dow Jones Indices.
All 20 metro areas posted double-digit gains for the year, but the biggest gains were in Phoenix (32.5%), Tampa (29.4%) and Miami (27.3%).
“Prices were strongest in the South (+25.7%) and Southeast (+25.6%), but every region continued to log impressive gains,” Lazzara said.
The smallest gains were reported in the District of Columbia (10.5%), Minneapolis (11.4%) and Chicago (12.2%).
“We continue to see very strong growth at the city level,” Lazzara said. “All 20 cities saw price increases in 2021, and prices in all 20 are at their all-time highs.”
Just how much the COVID-19 pandemic and government’s response to it have shifted market demand remains to be seen, Lazzara said.
“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 simply represents an acceleration of purchases that would have occurred over the next several years rather than a more permanent secular change.”