House prices saw their most significant increase in at least 34 years in 2021, rising a staggering 18.8%, according to data released Tuesday from the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
Mass migration to the South, Southwest, and Mountain West drove some of the sharpest increases in home prices, the Daily Mail reported.
The biggest jump was in Phoenix, where house prices reached 32.5%. Tampa, Miami, San Diego, Las Vegas, Denver, and Los Angeles also saw large appreciations.
"The influx of new investment is pulling in new residents from the northeast, many of whom have sold homes at prices well above the median in Tampa and Miami, which allows them to bid aggressively for the paucity of homes that are on the market," according to Wells Fargo economist Mark Vitner.
Craig J. Lazzara, a managing director at S&P Dow Jones Indices, predicted higher lending rates by the Federal Reserve might cool the housing market.
"In the short term," he said, "we should soon begin to see the impact of increasing mortgage rates on home prices."
Lazzara also said the way economists are viewing the housing boom is changing.
"We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic," he said.
"More data will be required to understand whether this demand surge simply represents an acceleration of purchases that would have occurred over the next several years rather than a more permanent secular change."
The real estate market saw the most existing homes sold in 15 years in 2021, with sales topping six million while supply sunk to an all-time low, the Mail reported.
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