December is usually the slowest month for the housing market, but price gains didn’t slow down one bit in 2020. In fact, they rose at the fastest pace in seven years.

Home prices nationally increased 10.4% compared with November 2019, according to the S&P CoreLogic Case-Shiller Home Price Indices.

That is the strongest annual growth rate in over six years, and a significantly stronger gain than in November, when prices were up 9.5%. It also ranks as one of the largest annual gains in the more than 30-year history of the index.

The 10-city composite annual increase was 9.8%, up from 8.9% in November. The 20-city composite posted a 10.1% gain, up from 9.2% in the previous month. Detroit was excluded, due to Covid-related data collection issues.

“2020′s 10.4% gain marks the best performance of housing prices in a calendar year since 2013,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “From the perspective of more than 30 years of S&P CoreLogic Case-Shiller data, December’s year-over-year change ranks within the top decile of all reports.”

Phoenix, Seattle, and San Diego continued to show the strongest price gains among the 19 cities surveyed. Prices in Phoenix rose 14.4% year-over-year price. In Seattle, they rose 13.6% and San Diego saw a 13.0% increase. Eighteen of the 19 cities reported higher price increases in the 12 months ending December 2020 versus the 12 months ending November 2020.

“These data are consistent with the view that Covid has encouraged potential buyers to move from urban apartments to suburban homes. This may indicate a secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway,” added Lazzara.

Home prices began to see big gains last summer, as Covid-driven demand from the stay-at-home culture descended on the housing market. Record low supply combined with record low mortgage rates caused bidding wars on homes across the nation.

Mortgage rates turned sharply higher last week, which will cut into affordability going forward into the 2021 spring market. Prices generally lag sales, so if sales do suffer, it is unlikely the market will see significant cooling of prices for several months.