U.S. Home Prices Continue Stronger 2020 Second Half, Radian Home Price Index Reveals

Rhea-AI Summary

The Radian Home Price Index (HPI) indicates a notable rise in U.S. home prices, with a monthly increase of 9.8% annualized from October to November 2020. The median home price reached $266,754, reflecting a year-to-date increase of over $16,400. Despite seasonal slowdowns, demand remains strong, evidenced by record low inventory levels and a 9.4% rise in prices over the last six months. However, the impending expiration of federal eviction moratoriums could temper future price appreciation.

Positive

• Home prices rose at an annualized rate of 9.8% from October to November 2020.
• The median home price increased to $266,754, up over $16,400 for the year.
• Ongoing supply-demand imbalances continue to support home prices.

Negative

• Federal eviction moratorium expiration on December 31 could impact future price appreciation.

Home prices across the United States rose at a faster pace, in November, than the month prior (October 2020) and continued to appreciate at higher than 2020 average monthly rates. According to Radian Home Price Index (HPI) data released today by Red Bell Real Estate, LLC, a Radian Group Inc. company (NYSE: RDN), home prices nationally rose from the end of October 2020 to the end of November 2020 at an annualized rate of +9.8 percent. The Radian HPI is the most comprehensive and timely measure of U.S. housing market prices and conditions.

The Radian HPI also rose 7.6 percent year-over-year (November 2019 to November 2020). Through the first eleven months of 2020, the average monthly annualized increase was also 7.7 percent with each of the last four months reporting above average appreciation. The Radian HPI is calculated based on the estimated values of more than 70 million unique addresses each month, covering all single-family property types and geographies.

“Typically, home transactions slow going into the winter months and price appreciation softens, however 2020 is not a normal year in many ways—and home price increases are one of them. We continue to experience nationwide shortages in supply related to demand,” noted Steve Gaenzler, SVP of Data and Analytics. “With the Presidential election certified and a new administration poised to control housing policy and influence the direction of future fiscal stimulus, new questions arise relative to the housing market entering 2021. Unless extended, the Center for Disease Control’s temporary eviction moratorium, along with other state and federal assistance programs end on December 31^st. Failure to extend could certainly be cause to temper the pace of appreciation as we enter the new year,” added Gaenzler.

NATIONAL DATA AND TRENDS

• Median home price in the U.S. rose to $266,754
• Home prices rose an annualized 10.2 percent over the last three months

Nationally, the median estimated price for single-family and condominium homes rose to $266,754, representing a more than $16,400 increase so far in 2020. Across the U.S., home prices nationally rose 9.4 percent over the last six months, a strong increase over the prior six-month appreciation rate of just 5.8 percent. On-going imbalances between housing supply and demand continue to provide solid support for home prices. On the demand side, while November 2020 recorded the lowest level of monthly home sale transactions since May 2020, it still represented the most sold homes in any November, and a full 14 percent higher than the busiest November on record. Conversely, supply of homes in November, as measured by the count of listings of homes for sale, was the lowest month in the last 10 years. Strong demand for the limited supply also pushed the average number of days that a property for sale has been listed to 84 days, the shortest stay in over a decade, and another record.

REGIONAL DATA AND TRENDS

• November gains were solid across all regions
• From year earlier, Midwest maintains strongest Region while Northeast remains weakest

Similar to our national reporting, all U.S. regions reported positive price appreciation in residential markets in November 2020. Three of our regions reported modest reductions in annualized appreciation rates from October (MidAtlantic, MidWest and Northeast) while the remaining three regions reported annualized rates in November higher than those recorded in October (South, Southwest, West).

In November, 18 of the 50 U.S. states reported faster appreciation as compared to the prior month, while the remaining 32 slowed. Momentum of home price appreciation differs by state, however, all states are still recording positive home price appreciation. Not surprising, smaller states with larger populations of lower priced homes, more open space, and fewer large metros areas are appreciating the most as compared to states with the largest cities.

METROPOLITAN AREA DATA AND TRENDS

• Second half recovery benefiting all metros
• 2020 is on pace to be one of the most active on record

Across the 20-largest metro areas of the U.S, the second half of the year continues to dramatically outperform the first half. While the month-over-month annualized appreciation rate was higher in only two of the largest metros, the five months since mid-year are significantly stronger than the first six months in all 20-large metros. The strength of the third quarter recovery has easily spilled over into the final quarter of 2020.

So far in 2020, the average median estimated home price of homes in the 20-largest metros is higher by more than $21,500. In each of these metros, the last five months of appreciation represents more than the first 6 months of this year. On average median estimated home prices have increased by $13,000 in the third and fourth quarters in large metros, whereas the increase from January through June (one extra month) was slightly over $8,000.

ABOUT THE RADIAN HPI

Red Bell Real Estate, LLC, a subsidiary of Radian Group Inc., provides national and regional indices for download at info.radian.com/hpi, along with information on how to access the full library of indices.

Additional content on the housing market can also be found on the Radian Insights page located at https://radian.com/news-and-knowledge/insights.

The company offers the Radian HPI data set along with a client access portal for content visualization and data extraction. The engine behind the Radian HPI has created more than 100,000 unique data series, which are updated on a monthly basis.

The Radian HPI Portal is a self-service data and visualization platform that contains a library of thousands of high-value indices based on both geographic dimensions as well as by market, or property attributes. The platform provides monthly updated access to nine different geographic dimensions, from the national level down to zip codes. In addition, the Radian HPI provides unique insights into market changes, conditions and strength across multiple property attributes, including bedroom count and livable square footage. To help enhance its customers’ understanding of granular real estate markets, the library is expanded regularly to include more insightful indices.

In addition to the services offered by its Red Bell subsidiary, Radian is ensuring the American dream of homeownership responsibly and sustainably through products and services that include industry-leading mortgage insurance and a comprehensive suite of mortgage, risk, title, valuation, asset management and other real estate services. The company is powered by technology, informed by data and driven to deliver new and better ways to transact and manage risk. Visit www.radian.com to see how Radian is shaping the future of mortgage and real estate services.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201218005692/en/

FAQ

What is the current median home price in the U.S. according to the Radian HPI?

The current median home price in the U.S. is $266,754.

What was the annualized home price increase from October to November 2020?

The annualized home price increase from October to November 2020 was 9.8%.

How has the home price appreciation trend been in 2020?

Home price appreciation in 2020 has been strong, with an average annualized increase of 7.7% over the first eleven months.

What potential challenges could affect home prices in early 2021?

The expiration of federal eviction moratoriums on December 31 may temper the pace of home price appreciation.

How did the home sales in November 2020 compare to previous years?

November 2020 had the highest number of home sales for the month, 14% higher than the busiest November on record.