Home-price growth surged to a record in 2021, as low mortgage-interest rates prompted buyers to compete fiercely for a limited number of homes for sale.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 18.8% in the year that ended in December, unchanged from the prior month. The calendar-year increase was the highest since the index began in 1987.

The Covid-19 pandemic kicked off a nationwide housing boom. Households took advantage of record-low rates and sought more space to work from home. Home sales climbed to a 15-year high in 2021.

A shortage of homes for sale led to bidding wars, pushing price growth to new highs. The low inventory has persisted into this year, with the number of homes for sale sliding to a record low in January, according to the National Association of Realtors.... Read More: WSJ