; Residential Housing Remains a Bright Spot in Uneven Economic Recovery

• The S&P CoreLogic Case-Shiller U.S. national home price index rose 9.5% in November from one year earlier, the fastest pace since 2014
• The S&P CoreLogic Case-Shiller 20-City home price index rose 9.1% in November from one year earlier; 4 out of 20 cities saw double-digit year-over-year gains
• Residential homebuilding will support the economic recovery, although house price growth will be weaker in 2021

The not-seasonally-adjusted S&P CoreLogic Case-Shiller U.S. national home index rose 9.5% in November from one year earlier, up from 8.4% growth in October. The S&P CoreLogic Case-Shiller 20-City index rose 1.4% in November from the prior month, the sixth straight monthly increase; prices were up from the prior month in all 20 cities covered. The strongest gains from the prior month were in New York (up 1.8%), Boston (up 1.4%) and Tampa (up 1.4%).

The S&P CoreLogic Case-Shiller home price indices are repeat-sales indices which track the three-month moving averages of single-family house prices in the U.S. House prices were 9.1% higher on a year-ago basis in 20 U.S. cities. Phoenix (13.8%), Seattle (12.7%) and San Diego (12.3%) had the strongest gains from the prior year while Las Vegas (6.8%), Dallas (7.2%) and Chicago (7.5%) had the weakest gains.

Supported by record-low mortgage rates and strong consumer balance sheets, residential housing demand will grow in 2021, albeit at a slower pace than in 2020. Mortgage rates are likely to increase slightly this year and tight housing inventories will loosen in the second half of the year when the vaccine rollout has reached a substantial part of the population and sellers feel more comfortable listing their homes.

The continued strength in residential building permits bodes well for strong construction activity in 2021. Residential construction will continue to boost the overall economy this year. Passage of the proposed first-time homebuyer tax credit policy by the Biden administration is an upside risk to residential housing price growth in 2021.

• The S&P CoreLogic Case-Shiller U.S. national home price index rose 9.5% in November from one year earlier, the fastest pace since 2014
• The S&P CoreLogic Case-Shiller 20-City home price index rose 9.1% in November from one year earlier; 4 out of 20 cities saw double-digit year-over-year gains
• Residential homebuilding will support the economic recovery, although house price growth will be weaker in 2021

The not-seasonally-adjusted S&P CoreLogic Case-Shiller U.S. national home index rose 9.5% in November from one year earlier, up from 8.4% growth in October. The S&P CoreLogic Case-Shiller 20-City index rose 1.4% in November from the prior month, the sixth straight monthly increase; prices were up from the prior month in all 20 cities covered. The strongest gains from the prior month were in New York (up 1.8%), Boston (up 1.4%) and Tampa (up 1.4%).

The S&P CoreLogic Case-Shiller home price indices are repeat-sales indices which track the three-month moving averages of single-family house prices in the U.S. House prices were 9.1% higher on a year-ago basis in 20 U.S. cities. Phoenix (13.8%), Seattle (12.7%) and San Diego (12.3%) had the strongest gains from the prior year while Las Vegas (6.8%), Dallas (7.2%) and Chicago (7.5%) had the weakest gains.

Supported by record-low mortgage rates and strong consumer balance sheets, residential housing demand will grow in 2021, albeit at a slower pace than in 2020. Mortgage rates are likely to increase slightly this year and tight housing inventories will loosen in the second half of the year when the vaccine rollout has reached a substantial part of the population and sellers feel more comfortable listing their homes.

The continued strength in residential building permits bodes well for strong construction activity in 2021. Residential construction will continue to boost the overall economy this year. Passage of the proposed first-time homebuyer tax credit policy by the Biden administration is an upside risk to residential housing price growth in 2021. 

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.