Home prices in the U.S. ended 2019 on a high note.
Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 3.8% annual gain in December, up from 3.5% a month earlier and the fifth month of home price growth acceleration. The 20-City Composite posted a 2.9% annual gain, beating analyst estimates of 2.8%, according to Bloomberg. The 20-City Composite is up from 2.5% in November.
“December’s results bring the National Composite Index to a 3.8% increase for calendar 2019. This marks eight consecutive years of increasing housing prices (an increase which is echoed in our 10- and 20-City Composites),” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “At the national level, home prices are 59% above the trough reached in February 2012, and 15% above their pre-financial crisis peak. Results for 2019 were broad-based, with gains in every city in our 20-City Composite.”
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A nationwide housing shortage is pushing up prices. Total housing inventory at the end of January totaled 1.42 million units — the lowest level since 1999, according to the National Realtors Association. Inventory is down 10.7% from a year ago.
“Home sales have been trending higher and inventory remains low, signaling strong home price appreciation momentum,” said BofA Securities in a recent note.
A recent Redfin survey of brokers reported intense competition among homebuyers for listed properties for sale since the beginning of 2020.
"Low mortgage rates have brought buyers back to the housing market, but a lack of listings means buyers are having to compete with one another to secure a sale and lock in a mortgage rate," said Daryl Fairweather, Redfin chief economist, in a press statement. "This competition pushes up prices, which means that even though buyers can get a good deal on a mortgage now they are often paying a higher sticker price."
For the seventh consecutive month, Phoenix topped the 20-City Composite posting a 6.5% year-over-year price gain — the highest among all the cities. Charlotte and Tampa followed reporting a 5.3% and 5.2% annual gain, respectively. Twelve of the 20 cities reported an acceleration in price increases in December.
Amanda Fung is an editor at Yahoo Finance.