U.S. home prices jumped by the most in six years in October as the coronavirus pandemic encouraged more people to seek home ownership.
The combination of strong demand and limited supply caused home prices to increase by 7.95% year-over-year, the highest percentage jump since June 2014, according to the S&P CoreLogic Case-Shiller 20-city home price index.
Millions of Americans have been forced to work from home because of the pandemic. This has prompted many to seek out homes with more space. In New York City, pending home sales, or homes in contract, continued to increase and were up over 40% during the week of Dec. 12 compared to the same period last year, according to Investopedia’s New York City Recovery Index.
Nineteen of the 20 cities in the S&P CoreLogic Case-Shiller 20-city home price index — including New York, Atlanta, Boston, and Los Angeles — reported larger year-over-year price gains in October than September. Detroit, however, was unable to accurately report its home sale records due to delays caused by the pandemic.
Phoenix saw the biggest price gain for the 17th month in a row, with an increase of 12.7% compared to last year. Seattle and San Diego followed with home price increases of 11.7% and 11.6%, respectively.
Home builders and home improvement retailers have benefitted from the surge in homebuyer interest. Shares in construction companies PulteGroup, KB Home, and Toll Brothers have surged 127%, 214%, and 198%, respectively, since March when the pandemic hit the U.S. Meanwhile, retailers Home Depot and Lowe’s have gained 71% and 147% in value since March.