Clear Capital: Home Prices Grew 5.3 Percent In October – NMP Skip to main content

Clear Capital: Home Prices Grew 5.3 Percent In October

Nov 02, 2021
Photo of a stack of coins on the rise.
Director of Events

Clear Capital's October 2021 Home Data Index reported that home price growth was at 5.3% on a quarter-over-quarter basis and close to 20% year-over-year.

The West region was again the leader, with prices increasing 24.3% on a YOY basis. The strongest metropolitan statistical area (MSA) in the West was again, Phoenix, where prices rose 57%, reported Brent Nyitray of the Daily Tearsheet. Clear Capital notes that COVID-related noise might be exaggerating the numbers there, but strong appreciation there was confirmed by a 31% increase in price-per-square-foot. Other strong Western MSAs include Las Vegas (up 26%) and Portland (up 21%).

The South was the next best performer, with prices rising 20.5% YOY, according to the report. Tampa was the leader here, with prices rising 31%. Raleigh (up 25%) and Orlando (up 25%) were other top performers in the region. The Northeast saw prices rise 16.7% with the top performer being Providence, where prices rose 19%. Prices also increase by 18% in Hartford.

Meanwhile, prices in the Midwest increased by 15.9%, with Columbus, where prices rose 17% being a top performer.

“While the residential real estate market has been experiencing torrid growth, the economy seems to be slowing down. The advance estimate for third-quarter GDP came in at a disappointing 2% and the Chicago Fed National Activity Index turned negative in September, indicating the economy is growing below trend,” according to Nyitray. “The conventional wisdom was that the economy would accelerate into the end of the year; instead, the economy seems to be decelerating.”

He added that the shortages of lumber, construction materials, and skilled labor is keeping housing starts at 1959 levels and in turn pushing up house prices as demand is “insatiable.”

Nyitray predicts that wages are likely to increase but that it will likely set the stage for the wage-price spiral.

“Housing has always been an excellent inflation hedge,” said Nyitray. “In the first quarter of 1970, the median home price was $23,900. By the first quarter of 1980, the median price was $63,700. If you annualize this growth, it works out to be 10.3%. This did beat inflation, as the Consumer Price Index rose at a 7.4% annual pace. In comparison, the S&P 500 grew about 2% per year during the 1970s.  Treasuries performed so poorly during that period they earned the moniker 'certificates of confiscation.'”

About the author
Director of Events
Navi Persaud is Director of Events at NMP.
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