U.S. home price growth surged in the penultimate month of 2020 to a level not seen in nearly seven years.

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Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 9.5% annual gain in November, up from 8.4% in October. The last time the index reached this level was in February 2014. The 20-City Composite posted a 9.1% annual gain, up from 8% the previous month. The national and 20-City beat estimates of 8.85% and 8.7%, respectively, according to consensus compiled by Bloomberg.

“The trend of accelerating home prices that began in June 2020 has now reached its sixth month with November’s emphatic report,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a press statement. “As COVID-related restrictions began to grip the economy last spring, their effect on housing prices was unclear. Price growth decelerated in May and June before beginning a steady climb upward. November’s report continues that acceleration in a particularly impressive manner.”

Phoenix led the 20-City Composite for the 18th straight month, posting a 13.8% annual gain, while Seattle and San Diego followed, recording a 12.7% and 12.3% year-over-year gain, respectively.

“The housing market’s strength was once again broadly-based: all 19 cities for which we have November data rose, and all 19 gained more in the 12 months ended in November than they had gained in the 12 months ended in October,” said Lazzara.

‘A true secular shift in housing demand’

Home prices continued to be fueled by historically low interest rates, record low inventory, and heightened activity as a result of pent-up demand from COVID-19 lockdowns and a migration to the suburbs from urban areas.

“Recent data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Lazzara. “This may represent a true secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway. Future data will be required to address that question.”

“The housing market continued to hold stronger than expected throughout the last months of 2020 and despite increases in infection rates across the country. With mortgage rates steadily falling through the end of the year and buyers realizing that the pandemic is still far from over, robust demand was not fazed by traditional seasonal slowdown,” CoreLogic Deputy Chief Economist Selma Hepp said in a press statement prior to the release of the results. “And given that we are unsure of when social interaction will be safe again, homebuyers will continue to compete for fewer and fewer homes available for sale, which will drive home prices higher.”