Home prices skyrocketed almost 19 percent in 2021 due to a lack of supply and low borrowing costs.
As reported by The Hill, the S&P CoreLogic Case Shiller housing price index, a closely watched gauge of home prices, rose 18.8 percent annually in December 2021, tracking the highest calendar-year increase in 34 years.
The index rose 1.3 percent in December after seasonal adjustments, with prices rising in all 20 metro areas covered by S&P.
Indeed, home prices have grown rapidly since spring of 2020 thanks to pandemic-driven stimulus, lockdowns and interest rates. The intense demand in the market drove prices higher as buyers competed for the limited supply of homes.
While home sales fell off in 2021, housing prices continued to soar.
“More data will be required to understand whether this demand surge simply represents an acceleration of purchases that would have occurred over the next several years rather than a more permanent secular change. In the short term, meanwhile, we should soon begin to see the impact of increasing mortgage rates on home prices,” Craig Lazzzara, managing director at S&P, said.
