NEW YORK–Home prices rose 18.8% in 2021, according to the latest S&P CoreLogic Case-Shiller US National Home Price Index, the biggest increase in 34 years of data and substantially ahead of 2020's 10.4% gain.
According to the Index, all regions saw price gains last year, but increases were strongest in the South and the Southeast, each of which were up over 25%.
Phoenix, Tampa and Miami reported the highest annual gains among the 20 cities in the index in December, the Index found. Phoenix led the way for the 31st consecutive month with prices 32.5% higher than the year before. It was followed by Tampa with a 29.4% increase, and Miami, with a 27.3% increase.
"We continue to see very strong growth at the city level," said Craig J. Lazzara, managing director at S&P Dow Jones Indices, in a statement. "All 20 cities saw price increases in 2021, and prices in all 20 are at their all-time highs."
Decelerating Rate, But…
Lazzara said that over the past several months home prices have been rising at very high, but at a decelerating rate. But that deceleration paused in December. After peaking at 19.8% in August, the annual price increase declined through the fall to 18.8% in November, where it stayed in December.
Month-to-month, home prices in the US National Index, which covers all nine U.S. Census divisions, increased 1.3% in December from November, after seasonal adjustment, according to the Index.
Lazzara said the strength of the U.S. housing market is being driven, in part, by Americans who decided to move during the pandemic. Moreover, the National Association of Realtors reported the shortage of homes remains persistent.
Nevertheless, Lazarra said rising mortgage rates could throw some cold water on a very hot market. As CUToday.info recently reported, the rate on the 30-year fixed-rate mortgage recently hit 4% for the first time since 2019.
"With home prices expected to continue rising, even at a slower pace, affordability will increasingly challenge 2022 buyers as a decade-long underbuilding trend has left the housing market 5.8 million homes short of household growth," said Danielle Hale, Realtor.com's chief economist. "At the same time, we expect pandemic trends like workplace flexibility and competitive labor market conditions to give workers the boost in income and wider search areas they need to navigate a still-challenging housing market successfully."