While the pandemic has hammered retail, hospitality, restaurants, and many other sectors of the economy, the housing market continues to surge, according to the national Case-Shiller Home Price Index.
The national Case-Shiller Home Price Index rose 4.4% year-over-year in June. The smaller 10- and 20-city composite indices grew more slowly, at 2.8% and 3.5% year-over-year, respectively. The annual rate of growth was lower in June than in May in the national, 10-city and 20-city indices. On a monthly (seasonally adjusted) basis, the 10-city index was down 0.1% and 20-city index remained unchanged from May; the national index was 0.2% month-over-month.
Mortgage rates and for-sale inventory are each plumbing new lows, ratcheting up competition for the few homes on the market. That’s placed consistent upward pressure on home prices, a trend that has held through the summer. While recent data suggest headwinds such as the enduring spread of the coronavirus and uncertainty surrounding the next round of relief payments could jeopardize the path of the economic recovery, these concerns haven’t materialized in home prices to this point. It could be that the housing market will eventually suffer as these concerns linger, but it appears that low rates are here to stay for now, which should continue to send prices higher.
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