Residential real estate prices have risen sharply over the past two years. In some markets, they have increased by 30% in 2021. One reason is that Americans have become more mobile, by choice.
Low interest rates have allowed people to buy homes they could once not afford. Mortgage rates dropped below 3% for 30-year loans, although that number has risen recently. Americans also have left large and expensive coastal cities. While the median price of a home nationwide is approximately $350,000, in like San Francisco and New York the number can be twice that. Inland cities also have lower costs of living in general.
Another catalyst for a more mobile America is the COVID-19 pandemic. Companies shut offices starting in the spring of 2020. Many have not reopened or are set up for a small portion of their workforces. People have worked from home for months, and some companies have said they will allow this arrangement indefinitely.
The gold standard of home price research in the United States is the S&P CoreLogic Case-Shiller Indices. They are released each month and cover the entire county and the country’s 10 largest and 20 largest cities.
In December 2021, home prices rose 18.8% nationwide, which was the same rate as in November. Craig J. Lazzara, managing director at S&P DJI, commented on the year’s data:
This is the highest calendar year increase in 34 years of data, and substantially ahead of 2020’s 10.4% gain. The 10- and 20-City Composites rose 17.0% and 18.6%, respectively – a record for the 20-City Composite, and the second-best year ever for the 10-City Composite.
Phoenix topped the list with an increase of 32.5% for the period. This was the 31st month it was at the head of the 20 cities measured. Tampa and Miami followed with gains of less than 30%.
These are the December 2021 price increases for the country’s 20 largest cities:
- Atlanta (21.9%)
- Boston (13.4%)
- Charlotte (23.8%)
- Chicago (12.2%)
- Cleveland (13.3%)
- Dallas (26.0%)
- Denver (20.3%)
- Detroit (14.5%)
- Las Vegas (25.5%)
- Los Angeles (19.3%)
- Miami (27.3%)
- Minneapolis (11.4%)
- New York (13.6%)
- Phoenix (32.5%)
- Portland (17.9%)
- San Diego (25.9%)
- San Francisco (18.8%)
- Seattle (23.9%)
- Tampa (29.4%)
- Washington (10.5%)
Click here to see in which cities buying a home is most expensive.
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