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M R EP O RT | 43 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST ORIGINATION Home Prices: An Unseasonal Summer Spike August price growth accelerated in most cities, but which regions fell behind? T he newly released national Case-Shiller In- dex shows that August housing market trends saw a massive shift from previ- ous years. The demand for homes in August was high, and price growth soared in most cities. Although sales volumes typically slow down towards the end of summer, the data shows that sales volumes and buy- ing demand picked up speed in August. CoreLogic's in-depth analysis gives more insight into just how much hous- ing trends defied the odds in August. The national Case- Shiller Index reached a new high by increasing 5.71% in August, which is the fastest growth rate reported since July of 2018. The month-to- month index increased by 1.06% from July, which is the most rapid growth rate since the spring of 2017. The demand for homes has remained high since mid-May, staying well above the levels seen around the same time in 2019. This year is likely to become the strongest year of home sales since 2006 if this trend continues into the next coming months. The lack of inventory in 2020 has only exacerbated the demand for homes. At the beginning of this year, the for-sale stockpiles were about 15% below the previ- ous year's inventories. Since the pandemic swept the country, inventories for homes for sale has fallen 25% below the home sale levels of 2019. The lack of new homes for sale combined with a larger demand caused most cities to see a growth in August's home prices. Phoenix saw the most robust accelera- tion in home prices for the 14th consecutive month. In August, the home sale price went up by 9.9% since the same time last year. Seattle also held onto its spot in second place, with a year-over- year increase of 8.5% in home sale prices. San Diego increased by 7.6%, Cleveland prices grew by 6.9%, and Los Angeles went up 6.8%. These three cities are recent August additions to the top five cities with the most accelerated home price growth. Across the nation, home prices were 21% higher in August than they were during the peak of spring 2006. Despite most cities see- ing some growth in home prices, there were a few exceptions. Las Vegas, Chicago, and Minneapolis all experienced slowing price growth in August. This is still an improve- ment from July, which saw eight different metro areas exhibiting slowing price growth. COVID- 19's Impact on Home Seller Sentiment Here's why the health crisis is causing many Americans to hesitate when it comes time to sell. T he competition among homebuyers is intense, and home prices have been soaring in recent months. The cause of this heat- ed competition and rising prices is the short supply of homes for sale. This lack of inventory has been prevalent across the country since COVID-19. New data from a Zillow survey shows how the pandemic may be responsible for the recent lack of homes for sale. Approximately 25% of potential sellers cited COVID-19 health con- cerns as a reason they were not interested in selling their home right now. Another reason sellers may be holding off is that more Americans have taken advan- tage of COVID-19-era mortgage forbearance programs. About 6% of survey respondents said that these forbearance programs were why they were putting off selling their homes. A little more than one-third of the survey respondents (34%) said that life uncertainty was a key reason they wouldn't sell right now but perhaps in the next three years. Similarly, 31% of respondents said that finan- cial uncertainty was why they wouldn't sell during this time. The pandemic has caused life and economic uncertainty across the country, which keep sellers out of the market. The recent rise in sales prices, which have also occurred in the wake of the pandemic, is another reason sellers are holding off. Median home prices are at record- breaking highs, "up nearly 11% year over year for the week end- ing September 5th." Nearly 40% of respondents considering selling their homes in the next three years claimed that they were waiting to sell later in the hopes of getting an even higher price. Since home prices have skyrock- eted during the pandemic, many potential sellers are concerned about whether they will be able to afford or find a new home if they sell right now. Among survey respondents who were consider- ing selling their homes in the next three years, 31% said they were pressing pause on their plans because they were worried about finding or affording a new home. The housing supply crisis has turned the market upside down as inventory is now down 37% year over year from 2019. There is no telling how long COVID-19's impact on sellers—and the hous- ing market overall—will last. The lack of inventory in 2020 has only exacerbated the demand for homes.