Home-price growth in the US accelerates as buyer demand picks up

HOME-PRICE growth in the US accelerated in December, capping a period with a steep drop in mortgage rates.

Prices nationally rose 5.5 per cent from a year earlier, according to data from S&P CoreLogic Case-Shiller. That’s larger than the 5 per cent annual gain in November. 

December’s index tracks the final three months of 2023, a time in which 30-year borrowing costs soared to a two-decade high of 7.79 per cent then fell sharply to end the year at 6.61 per cent.

The decline unleashed some pent-up demand among buyers who had to compete for a tight supply of homes listed for sale. The country’s persistent inventory shortage has helped push purchase prices ever higher. 

A measure of values in 20 cities was up 6.1 per cent from a year earlier in December, compared with a 5.4 per cent increase in the previous month. San Diego had the biggest year-over-year gain, at 8.8 per cent, followed by Los Angeles and Detroit, each with an 8.3 per cent increase.

On a seasonally adjusted basis, 10 of 20 markets beat prior records. Portland, Oregon, had an increase after 11 months of declines.

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“The term ‘a rising tide lifts all boats’ seems appropriate given broad-based performance in the US housing sector,” Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a statement. “Looking back at the year, 2023 appears to have exceeded average annual home-price gains over the past 35 years.” BLOOMBERG