CoreLogic's Home Price Index and HPI Forecast reported a 6.7% increase in home prices nationally, in September 2020 compared to September 2019. This makes the fastest annual acceleration since May 2014, according to the reports. Home prices are increased by 1.1% from August 2020.
Home-purchase demand paired with record-low mortgage rates and dwindling inventory contributed to the increase in home prices. CoreLogic cited the National Association of Realtors and U.S. Census Bureau, which reported that homes for sale fell to the lowest recorded level in September at 40% of that seen in September 2008 and 75% of that seen in September 2000.
"Housing continues to be a bright spot during an otherwise challenging economic time for many U.S. households," said Frank Martell, president and CEO of CoreLogic. "Those in sectors that weathered the transition to remote work successfully are now able to take advantage of low mortgage rates to purchase a home for the first time or to trade-up to a larger home."
"COVID has contributed to the acute shortage of inventory as the pace of new construction slowed and older prospective sellers postponed listing their homes until after the pandemic," said Dr. Frank Nothaft, chief economist at CoreLogic. "Once the pandemic passes or a vaccine is widely administered, we should see a noticeable pick-up in for-sale homes. And if the economy’s recovery is sluggish next year, distressed sales may also add to market inventory."
At the local level, markets continue to vary. For instance, Phoenix is seeing a severe shortage of for-sale homes and prices increased by 11.1% in September. Meanwhile, the New York-Jersey City-White Plains metros recorded a minimal 0.3% increase in home prices, as people opt for more space and privacy in less densely populated areas, according to the report.
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