Nationwide prices were up by 10.4% at the end of 2020.
Dallas-area home prices rose by the greatest percentage in almost three years in the latest nationwide comparison.
Prices in December were 8.4% higher year-over-year in the closely watched Standard & Poor’s CoreLogic Case-Shiller Home Price Index. Nationwide, prices were 10.4% higher than in December 2019.
“Home prices finished 2020 with double-digit gains,” S&P’s Craig J. Lazzara said in the report. “The trend of accelerating prices that began in June 2020 has now reached its seventh month.
“As COVID-related restrictions began to grip the economy in early 2020, their effect on housing prices was unclear,” Lazzara said. “Price growth decelerated in May and June, and then began a steady climb upward, and December’s report continues that acceleration in an emphatic manner.”
He said the year-end national price gains were the best since 2013.
The cities with the greatest year-over-year increases in December were Phoenix (up 14.4%), Seattle (13.6%) and San Diego (13%).
Price hikes were fueled by record-low home inventories at a time when low mortgage rates were encouraging home purchases.
“These data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” Lazzara said. “This may indicate a secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway.”
The Dallas area had one of the smallest year-over-year home price rises among the 20 major U.S. markets Case-Shiller tracks each month. Only Chicago (7.7%) and Las Vegas (7.9%) had smaller annual home price growth than Dallas.
Dallas-area home prices are nevertheless at a record high in the Case-Shiller index. Prices have soared by more than 80% in the last decade.
Case-Shiller’s index tracks over time the prices of specific single-family homes in each metropolitan area. It doesn’t include condominiums and townhouses and covers only pre-owned properties.
North Texas home sales were at a record of almost 120,000 houses sold by real estate agents in 2020, with median sales prices up 7% for the year.
“A wave of eager buyers — many of whom are looking to enter the market for the first time — sought to capitalize on record-low mortgage rates and snap up the relatively few homes available for sale, leading homes to fly off the shelves and prices to continue to grow,” Zillow Economist Matthew Speakman said in an email. “This forces would-be buyers to move very quickly to put an offer in on a home they desire, increases the likelihood that multiple offers will be fielded by the seller and ultimately places more upward pressure on prices.
“Looking ahead, with mortgage rates remaining relatively low and the wave of eager buyers continuing to swell, it’s unlikely that this competition for housing, and subsequent strong price appreciation, will meaningfully abate in the near future.”