WASHINGTON (AP) – US home prices have risen the most in October in more than six years as a pandemic-fueled buying race drives the number of properties available for sale to a minimum.
This combination of strong demand and limited supply pushed home prices up 7.9% in October from 12 months ago, according to the S&P CoreLogic Case-Shiller index of 20 cities on Tuesday. This is the largest annual increase since June 2014.
The coronavirus outbreak has forced millions of Americans to work from home and restricted other activities, such as eating out, going to the movies, or visiting gyms. This makes more people looking for homes with more space for a home office, a larger kitchen or space to work.
“The data for the past few months is consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, CEO of S&P Dow Jones Indices.
All 19 cities reported higher year-over-year increases in October than in September, Lazzara said. Detroit was unable to fully report its home sales data due to delays in coronavirus blockage.
The biggest price gain was in Phoenix for the 17th month in a row, where house prices rose 12.7% from a year ago. It was followed by Seattle with 11.7% and San Diego with 11.6%.
Home sales fell in November, according to the National Association of Realtors, after growing steadily over the past five months. Even after the decline, sales were almost 26% higher last month compared to a year ago. Sales were also boosted by low mortgage rates, which reflect the Federal Reserve’s measures to keep its short-term reference rate close to zero.
The number of homes for sale fell to 1.28 million in November, realtors said, enough to last just 2.3 months at the current pace of sales. Both figures are record lows.