Ultra-low rates and strong demand spur the record month-over-month increase
US house prices were on the rise nationwide in August, according to the Federal Housing Finance Agency.
The latest FHFA House Price Index (HPI) inched up 1.5% from July to August. Year over year, the HPI was 8% higher than a year ago.
"Between July and August 2020, national prices increased by 1.5%, which represents the largest one-month price increase observed since the start of the index in 1991," said Lynn Fisher, deputy director of the division of research and statistics for FHFA.
Fisher said that several pandemic-induced factors have driven the month-over-month gain.
"This large month-over-month gain contributes to an already strong increase in prices over the summer," she said. "These price gains can be attributed to the historically low-interest-rate environment, rebounding housing demand, and continued supply constraints."
On a seasonally adjusted basis, monthly house price changes in the nine census divisions ranged from +0.9% in the East South Central division to +1.9% in the West South Central division. The 12-month changes ranged from +7.2% in the West North Central division to +9.7% in the Mountain division.