U.S. home prices surged in October as the housing market remains strong after the COVID-19 pandemic, according to a key economic indicator.
Home prices climbed 18.4% in October compared to one year earlier, a deceleration from a 19.1% year-over-year increase in September, according to the S&P Corelogic Case-Shiller Index. Experts surveyed by The Wall Street Journal projected the index would grow 18.6% in November.
All 20 cities included in the index posted double-digit annualized gains. Phoenix saw a 32.3% increase, Tampa Bay, Florida, grew 28.1% and Miami increased 25.7%, according to the report.
Minneapolis and Chicago reported the smallest increases of 11.5% each.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in location preferences as households react to the COVID pandemic,” Craig J. Lazzara, managing director at the S&P Dow Jones Indices, said in the report. “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.”
The median existing-home sale price in November increased 13.9% on a year-over-year basis to $353,900, according to the National Association of Realtors (NAR). Home sales of previously occupied homes increased for the third straight month in November to 6.46 million.
Meanwhile, the number of first-time home buyers decreased 26% in November, the lowest level since January 2015 and a 32% decrease from the previous year, according to the NAR.