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U.S. home prices surge in August at near-record pace

UPDATED: Tue., Oct. 26, 2021

A “for sale” sign is displayed outside a home in Mount Lebanon, Pa., on  (Associated Press)
A “for sale” sign is displayed outside a home in Mount Lebanon, Pa., on (Associated Press)
Staff and wire reports Associated Press

From staff and wire reports

WASHINGTON – U.S. home prices jumped in August by a near-record amount from a year earlier, as Americans eager to buy a home drove up prices on a dwindling number of properties.

The S&P CoreLogic Case-Shiller 20-city home price index soared 19.7% in August compared with a year ago. That increase is just below July’s 20% jump, which was the largest gain on records dating back to 2000. Home prices are now at all-time highs in all 20 cities in the index.

The Case-Shiller index includes large metro markets. For comparison, however, Spokane County’s median home closing price in September was $380,000, compared with $389,728 in August and a record-breaking peak of $395,000 in July, according to data from the Spokane Association of Realtors.

The county’s median home closing price last month of $380,000 was a 21.2% increase from the $313,500 median in September 2020, according to data from the Spokane Association of Realtors.

Home sales have been healthy for most of this year, spurred by an ongoing desire among many people for greater space to wait out the coronavirus pandemic. Mortgage rates have also been historically low, though they have risen in recent weeks, and many Americans have become wealthier since the pandemic as stock prices have moved steadily higher, enabling them to afford a new home.

Phoenix reported the biggest price increase among the 20 cities that make up the index, as it has for more than two years. Its home prices increased 33.3% in August compared with a year earlier. Home prices in San Diego jumped 26.2%, the second highest, and Tampa’s home prices rose 25.9%, the third-largest gain.

Home prices in Seattle jumped 24.3% in August compared with a year ago, according to the Case-Shiller index, while those in Portland were up 19.2%.

There are signs that the rapid price gains of the past year are cooling a bit. August’s price increases, compared with a year ago, were slightly lower than in July, the first decline in annual price gains since June 2020. And price increases slowed in 12 of the 20 cities in the Case-Shiller CoreLogic index.

“The slowing acceleration in home prices suggests that buyer fatigue is setting in, particularly among higher-priced homes,” said Selma Hepp, CoreLogic Deputy Chief Economist.

Mortgage rates increased to 3.1% last week, the highest since April, according to mortgage-buyer Freddie Mac.

That increase likely pushed more people to look for and buy homes, before rates move even higher. Sales of existing homes jumped 7% in September.

Potential buyers still have relatively few homes to choose from, with just 1.27 million houses on the market eptember, down 13% in the past year. That’s pushed many buyers to move quickly.

Homes are typically selling within 17 days of hitting the market, according to the National Association of Realtors, and 86% of homes sold in September were on the market for fewer than 30 days.

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