Bidenflation: U.S. Home Prices Jump by Record 19.9%

US President Joe Biden walks to the Oval Office upon return to the White House in Washington, DC, on October 25, 2021. - President Biden returns from New Jersey, where he spoke to promote his Build Back Better Agenda. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via …
Photo by NICHOLAS KAMM/AFP via Getty Images

U.S. homes prices were up by a record amount in August compared with a year earlier, as Americans continued to bid up house prices.

The S&P CoreLogic Case-Shiller national home price index soared 19.9 percent in the 12-months leading to August. That’s the largest price jump in records going back to the 1980s.

The 20-city home price index jumped 19.7 percent in August compared with a year ago, just below July’s 20 percent jump that was the largest on record. Home prices are now at record highs in all 20 of the metropolitan areas tracked by the index.

The biggest jump in home prices was Phoenix’s 33.3 percent. That was followed by San Diego’s 26.2 percent gain and Tampa’s 25.9 percent rise.

As a candidate, Joe Biden promised to increase the supply of affordable housing. But in President Biden’s first eight months in office, prices of goods, services, and housing have soared. And the number of new single-family home construction projects declined in July, August, and September despite rising prices for new homes.

Many of the housing officials in the Biden administration regard single-family housing as detrimental to the climate and racial equity. They are developing plans to make it relatively more costly to maintain single-family zoning and construction new single-family homes compared with apartments and attached homes.

In early September, the Biden administration announced a plan that claims would “create, preserve, and sell to homeowners and nonprofits nearly 100,000 additional affordable homes for homeowners and renters over the next three years.” Some housing market experts believe the plan will not accomplish enough to make housing affordable.

There was some evidence that the pace of gains may be slowing. The monthly increase was 1.4 percent and has been declining for two months now.

Even still, August 2021 was the 12th largest month-over-month increase in the national index, according to Bill McBride of Calculated Risk.

“The top 5 have all been in the last year, and the last 13 months have all been in the top 25,” McBride wrote in his newsletter.

The number of homes available is shrinking. There were just 1.27 million houses on the market in September, 13 percent lower than a year ago.

An alternative measure of home prices, the Federal Housing Finance Agency House Price Index, showed prices rising 18.5 percent from August 2020 to August 2021.  On a monthly basis, prices were up 1 percent, a slowdown from July’s 1.4 percent gain.

“Annual house price gains remained extremely high in August but the pace of month-over-month gains continues to decelerate,” said Dr. Lynn Fisher, FHFA’s Deputy Director of the Division of Research and Statistics. “This does not mean house prices are at risk of declining—far from it, they continue to climb at a double-digit pace in all regions—but it does suggest we may have seen the peak in annual gains for the time being.”

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