Housing News

House Prices Haven't Risen This Fast in 40 Years

Remember back in December when we learned that home prices were rising faster than they had in 15 years? And then when that figure was topped the next month? Well, you ain't seen nothing yet.

According to new data from the Federal Housing Finance Agency, house prices in the U.S. rose in the fourth quarter by more than they've risen in at least 40 years.

FHFA data shows that home prices increased by 10.8% from the fourth quarter of 2019 to the fourth quarter of 2020. Prices in the fourth quarter of 2020 were also up 3.8% from the third quarter.

Both of those increases were the largest on record at the FHFA, which has kept records since the mid-1970s.

"House prices nationwide recorded the largest annual and quarterly increase in the history of the FHFA HPI," said Dr. Lynn Fisher, Deputy Director of FHFA's Division of Research and Statistics.

"Low mortgage rates, pent-up demand from homebuyers, and a limited housing supply propelled every region of the country to experience faster growth in 2020 compared to a year ago despite the pandemic," Fisher said. "In particular, house prices in western states and cities saw the highest rates of growth, where annual gains often rose above 10%."

According to the FHFA, house prices have now risen in every quarter since September 2011.

Given how much home prices rose in the fourth quarter, it's probably not a surprise that all 50 states saw their home prices increase.

According to the FHFA, the five states that posted the largest yearly increases from the fourth quarter of 2019 to the fourth quarter of 2020 were: Idaho 21.1%; Montana 15.5%; Utah 15.4%; Arizona 14.1%; and Connecticut 14.1%.

Even the states at the opposite end of the spectrum saw their prices rise year-over-year. According to the FHFA, the five states where home prices increased by the least amount were: District of Columbia 1.5%; Louisiana 5.9%; Hawaii 6.1%; North Dakota 6.7%; and Illinois 7.7%.

Beyond that, home prices rose year-over-year in every single one of the 100 largest metropolitan areas in the U.S.