U.S. home prices were up by 14.9% year-over-year in the final months of 2020, according to the latest survey by the National Association of Realtors.
“The fourth quarter of 2020 presented circumstances ripe for home price increases,” Realtors chief economist Lawrence Yun said in the report. “Mortgage rates reached record lows, thereby driving up the demand.
“At the same time, inventory levels also reached record lows, leading to grim inventory conditions of insufficient supply in the fourth quarter.”
More than half of the 161 major metro areas the Realtors track each quarter saw double-digit percentage home price increases.
The greatest percentage price gains in the nation were in Bridgeport, Conn. (39.2%); Pittsfield, Mass. (32.2%); Atlantic City, N.J. (30.0%) and Naples, Fla. (29.9%).
While near record low mortgage rates are driving a surge in home purchases, price jumps are putting the pinch on buyers.
“The average, working family is struggling to contend with home prices that are rising much faster than income,” Yun said. “This sidelines a consumer from becoming an actual buyer, causing them to miss out on accumulating wealth from homeownership.”
None of the U.S. metro areas that the Realtors surveyed saw a decline in home prices in the fourth quarter.