The impact of low interest rates and pent up buyer
demand played out in sharply increasing home prices in August. Both the Federal
Housing Finance Agency (FHFA) and S&P CoreLogic Case-Shiller indices posted
significant appreciation on an annual basis and acceleration in that
appreciation compared to prior months. CoreLogic Deputy Chief Economist
Selma Hepp commented, “The forgone spring home-buying season appears to have
fully shifted into summer months, leading to sales volumes that are picking up
speed at a time when they would normally show signs of slowing. Additional
demand was amplified by buyers looking for larger homes and second homes in
resort and beach areas. Current home price growth is exceptionally strong given
that the U.S. is an economic recession, but it is the historically low
inventories and record-low mortgage rates that are outweighing economic and
employment headwinds and fueling the price acceleration.”


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