Home prices surge in November as affordability concerns grow
Home prices experienced a year-over-year surge in November, increasing 8.2% annually, according to the latest Home Price Index (HPI) report from CoreLogic.
November’s yearly growth, the largest since March 2014, was up from November 2019’s gain of 3.7%. Compared with home prices from October, November’s prices were up 1.1%.
No states posted an annual decline in home prices during November. The states that posted the highest increases year-over-year were states that continued to serve as destinations for outbound residents of nearby expensive areas on the lookout for cheaper housing: Idaho, which saw prices grow 15.7% from November 2019 to November 2020, followed by Maine at 15.4%, and Indiana at 13.6%.
With home prices escalating, demand strong and low rates incentivizing more buyers to explore the market, affordability issues are starting to surface. Attom Data Solutions recently reported that price growth outpaced wage growth during the fourth quarter of 2020, and despite Redfin reporting that prices at the top end of the market grew faster than those in lower tiers in the three months ending Nov. 30, CoreLogic’s data showed that the lowest price bracket saw the highest gain in November. Prices of the most affordable homes increased 12% year over year in November, compared to 10% for the low- to middle-price tier, 9.3% for the middle- to moderate-price tier, and 8.4% for the high-price tier.
Price growth at the affordable end of the market is being driven by young buyers aging into their primary homebuying window within a favorable rate environment, said Frank Nothaft, CoreLogic’s chief economist. By Arnie Aurellano, Website content editor, Scotsman Guide