Despite typically being the slowest month for the housing market, December 2020 marked the fastest rise in home prices in nearly seven years, according to the S&P CoreLogic Case-Shiller Home Price Indices. The 10.4% increase as compared to December 2019, was up from the 9.4% increase in November and ranks as one of the largest annual gains in the more than 30-year history of the index. With the spring housing market upon us, demand for housing will continue its upward trajectory.
CoreLogic Deputy Chief Economist, Selma Hepp, stated, “Persistent buyer demand amid a severely undersupplied housing market has undeniably pushed home prices to new highs in 2020. Continual decline in mortgage rates to new record lows, particularly in December, has also helped expand the affordability box for some buyers and allowed them to bid up prices higher than they would have been able to if rates were higher.” On the flip side, we have seen an uptick in rates over the past two weeks. This slight uptick may be exactly what the market needs to help stabilize the rapidly increasing prices for housing, and continuous bidding wars. In addition, as it has been all along, the main focal point is the lack of inventory, which ultimately creates this extraordinary demand!