Home prices continue to move higher due in part to the shift from urban apartments to suburban homes. The November S&P Case-Shiller 20-City Home Price Index saw an annual gain of 9.1% from November 2019. There was a 1% monthly increase from October to November. The National Index saw a 9.5% increase. Spokesperson Craig J. Lazzara said, “Recent data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes. This may represent a true secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway. Future data will be required to address that question."
The housing market continues to be a beacon of light for the U.S. economy and is expected to carry that torch in 2021. Zillow recently forecasted that home sales growth will be at the fastest pace in 2021 since the early 1980's. Zillow is forecasting near 22% year over year growth for a total of almost 6.9 million homes sold this year - the fastest pace in annual sales growth since 1983. But don't count city living out just yet due to the vaccine rollout and as local economies reopen. Zillow is predicting that people who left in 2020 will come back to the cities in 2021, especially young people who may have moved back home when the pandemic hit.
The Federal Housing Finance Agency also released robust house price gains today. The Home Price Index rose monthly by 1% from October 2020 to November 2020 while seeing an 11% gain annually from November 2019 to November 2020. Dr. Lynn Fisher, FHFA's Deputy Director of the Division of Research and Statistics said, “The acceleration has been slowing but annual gains now outpace the prior housing boom. Current conditions can be explained by fundamentals, including low rates and tight housing supply, which have been intensified by the pandemic."