The US housing boom rages as home prices rise 18.4% in October

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US house prices rose again in October as the real estate market continued to boom after last year Coronavirus recession.

The S&P CoreLogic Case-Shiller 20-City House Price Index, released on Tuesday, rose 18.4% year over year in October. The increase marked a slight slowdown from a 19.1% year-over-year increase in September, but was roughly in line with economists’ expectations.

All 20 cities in the index posted double-digit annual gains. The hottest markets were Phoenix (up 32.3%), Tampa (28.1%) and Miami (25.7%). Minneapolis and Chicago had the smallest gains, each with 11.5%.

the The housing market was strong Thanks to the lowest mortgage rates, a limited supply of homes on the market and a backlog of consumers who were blocked by the pandemic last year. The COVID-19 pandemic has driven many Americans, tired of being locked up during lockdowns and office closings at home, to Housing hunting in suburbs that offer more space and are not as overcrowded as apartments in large cities. However, many other homeowners were reluctant to sell during the pandemic and new home construction has failed due to the lack of materials, land and labor.

It remains unclear whether this shift is permanent or an anomaly, said Craig Lazzara, managing director at S&P Dow Jones Indices.


Why the real estate market continues to explode …

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“We previously indicated that the strength of the US housing market is being driven in part by a change in location preferences as households react to the COVID pandemic,” Lazzara said or reflects an acceleration in purchases that would have occurred over the next few years reflects more permanent secular change. ”

Mortgage rates fell last week – to 3.05% for the benchmark 30-year home loan and 2.66% for the 15-year fixed rate. Persistently low interest rates signal that credit markets appear to be more concerned about the harm to economic growth from the Omicron variant than about the highest inflation rates in nearly 40 years.

To keep up with the demand for home purchases, iBuyers – companies that use technology and real estate data to create an automated listing for a home – have launched bots as a quick and convenient way to sell. Although they are one of the few real innovations that has reached the real estate industry in recent years, Consumers remain skeptical.

The National Association of Realtors reported last week that sales of previously occupied homes rose to a seasonally adjusted annual rate of 6.46 million for the third straight month in November.


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