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Home Sales Sales Show Record Year Growth

-Editorial

The recent jump in home values over the course of the Covid-19 pandemic has given U.S. homeowners record amounts of housing wealth that are helping the economy. 

Annual home price gains averaged 15% in 2021, up from 6% in 2020, according to CoreLogic. Strong pandemic-driven demand, record low supply, and record low mortgage rates conspired to create those hefty gains. Bidding wars are now the norm, and desperate buyers are competing with investors who want to cash in on the hot market. The upward trend is continuing, despite winter being historically the slowest season for housing.

National home prices increased 18.5% year over year in December 2021, according to the latest report. The December 2021 HPI gain was up from the December 2020 gain of 8.9% and was the highest 12-month growth in the U.S. index since the series began in 1976. Price appreciation averaged 15% for the full year of 2021, up from the 2020 full-year average of 6%. 

Home price growth in 2021 started off at 10% in the first quarter, steadily increasing and ending the year with an increase of 18% for the fourth quarter. While home price growth is expected to slow during 2022, the forecast shows it will remain high in the first half of the year and average 9.6% for the full year.

While all states showed annual increases in December, appreciation was strongest in Arizona, with an appreciation of 28.4%, followed by Florida (+27.1%) and Utah (+25.2%). At the low end, Washington, D.C., saw home prices increase 3.7%, and home prices in New York increased 7%. Population growth in some states added to homebuying demand in 2021, pushing up home prices. Arizona, Florida, Utah, and Nevada were all in the top 10 for a percentage increase in population growth in 2021. 

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