Home-inventory continues to be at a historic low, as extremely low interest-rates and cultural shifts resulting from the COVID pandemic are driving up demand. Across the country, people are looking for more space in which to work and educate from home. As surely as day follows night, this combination of unprecedented low supply and high demand is having a marked impact on the average price in existing home sales.
According to the S&P CoreLogic Case-Schiller National Home Price Index, the average home-price across the country’s major metropolitan areas rose 5.7% in August, the Wall Street Journal reports. This follows an increase of 4.8% in July. Inventory is still very low, while the rate of home sales continues to rise, driving up the price of houses on the market.
The Commerce Department released a report last week that homeownership was at 67.4% nationally in the third quarter. This is down from the second quarter of this year, when homeownership was at 67.9%. But it is up notably from 64.8% in the third quarter of last year, indicating just how strong the residential real estate market has been, despite the damage dealt by COVID-19 in other sections of the economy.
Of the 19 major metropolitan areas reported on in the Case-Schiller 20-city index, all of them experienced a rise in home-price. Detroit was not included in the month of August due to delays in reporting and collecting data. The most dramatic increase was seen in Phoenix, were home-price grew 9.9%
The Case-Schiller Index has traditionally flattened or even declined towards the end of the year. It is certainly possible that the home prices will experience a sharp decline going into the winter, especially during the holiday season. On the other hand, it has risen month to month consistently since January of 2019.
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