Exceeding economists’ expectations, new data shows home prices rose nearly 5% in July as the housing market continued to demonstrate relative immunity to the COVID-19 recession.
According to the latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, home prices continued to climb in July, rising 4.8% — up from a 4.3% annual gain in June.
Low mortgage rates are driving much of the demand — but surprisingly, so is the pandemic, said CoreLogic.
“Housing market resiliency persisted throughout the summer as traditional first-time buyers sought refuge in larger square footage and outdoor space, and buyers who had not been financially impacted by the pandemic sought second homes in resort, beach and mountain areas,” said CoreLogic Deputy Chief Economist Selma Hepp in a statement.
CoreLogic’s 10- and 20-City Composites also rose at an accelerating pace in July compared to June, up 3.3% and 3.9%, respectively.
Prices rose at the fastest pace in Phoenix (up 9.2% from last year), Seattle (7%) and Charlotte (6%), while the smallest gains were in Chicago (up 0.8%) and New York City (1.3%).
In Miami, home prices were up 4.1% in July year over year.
CoreLogic predicted demand will likely keep home price growth strong over the coming months, boosting the economy and providing a much-needed cushion for struggling homeowners who have been financially impacted by the pandemic. “Fortunately, strong price growth is also helping homeowners in forbearance programs by shielding their equity positions in case they are forced to sell their home,” Hepp said. “Those homeowners may be able to sell a home without going through a short sale or a foreclosure.”