U.S. Home Prices Surge with Record Year in 2021

Photo by Avi Waxman

​By Colin O'Leary
February 22nd, 2022

The average price of a home in the U.S. soared by 18.8% in 2021, according to a report from the S&P CoreLogic Case-Shiller National Home Price Index. The S&P CoreLogic Case-Shiller National Home Price Index tracks average home prices in major metropolitan areas across the country. The yearly increase in home prices was the highest since the index began tracking home prices in 1987. Data over at Zillow shows similar numbers. The Zillow Home Value Index tracks home values in the United States. Zillow says the typical value of a home in the United States is currently around $325,000, an increase of 19.9% year over year. Zillow is bullish on the real estate market for 2022. They are predicting home values to climb towards $380,000 by the end of the year. 

Last year was one of the busiest in recent history for home sales in the U.S. The total number of homes sold in the United States climbed to a 15-year high in 2021, according to the National Association of Realtors. Existing home sales totaled 6.12 million – an increase of 8.5% from 2020 and the highest annual level since 2006. This figure does not include new construction. Low inventory and fierce demand from first time home buyers and investors led to a record year for the housing market. Sparked by the global covid-19 pandemic, buyers took advantage of record low interest rates in search of larger spaces where they could work from home in one of the busiest years since the U.S. recession in 2008. 

First time homebuyers continue to struggle to compete against cash buyers and investors in a market faced with rising interest rates and record low inventory. The shortage of homes has sparked many bidding wars, pushing prices even higher than usual. The Phoenix Metropolitan area had the fastest home-price growth in the country, at 32.5%. The Tampa Bay Metropolitan area posted the second-fastest growth, at 29.4%.