Home prices soared almost 19 percent higher in 2021 as a severe lack of supply and low borrowing costs poured fuel on housing costs. The S&P CoreLogic Case Shiller housing price index, an important gauge of home prices, rose 18.8 percent annually in December 2021, tracking the highest calendar-year increase in more than 30 years. The index rose 1.3 percent in December after seasonal adjustments, with prices rising in all 20 metro areas covered by S&P.
Home prices have risen rapidly since spring 2020, when pandemic-driven stimulus, lockdowns and interest rate cuts spurred a sharp increase in home sales. The intense demand drove prices higher as buyers competed for a limited supply of houses and builders were unable to keep up amid pandemic restrictions. While home sales fell off in 2021, housing prices steamed ahead with buyers competing for dwindling inventory. Supply chain disruptions, shipping delays and other pandemic-related snarls have also hindered builders from filling the shortfall.
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