Steel Markets

Home Price Growth Shows No Sign of Slowing

November 24, 2020

Home prices in September surged to their biggest annual gain in six years, says the latest data from S&P Case-Shiller. The S&P Core-Logic Case-Shiller National Home Price NSA Index jumped 7 percent from a 5.8 percent gain in August.

“Housing prices were notably – I am tempted to say ‘very’ – strong in September,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “This month’s increase may reflect a catch-up of COVID-depressed demand from earlier this year; it might also presage future strength, as COVID encourages potential buyers to move from urban apartments to suburban homes. The next several months’ reports should help to shed light on this question.”

The 20-city composite, minus the Detroit area, posted a 6.6 percent annual gain, a strong uptick from 5.3 percent the previous month. Detroit data was unavailable due to Covid-19 disruption to record gathering. On a month-over-month basis, the National Index posted a 1.2 percent increase, while the 10-City and 20-City Composites posted increases of 1.3 percent and 1.2 percent, respectively, before seasonal adjustment.

Phoenix, Seattle and San Diego led the price gains with home prices up 11.4 percent, 20.1 percent, and 9.5 percent, respectively. Phoenix has led the nation in price increases for the past 16 months.

“The delayed spring homebuying season fueled sales well into October and past the time when they would normally begin to slow down,” said George Ratiu, senior economist at realtor.com. “Heading into winter, demand continues to be strong, driven by mortgage rates, which have broken record lows 13 times this year, and a growing list of companies that have extended their remote work policies well into 2021.”