Home price growth in the U.S. accelerated in the final month of 2020 — the fastest pace in eight years. The results top off what was a record year for the housing market despite the COVID-19 pandemic.

Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 10.4% annual gain in December, up from 9.5% in November — the fastest growth rate since 2013. The 20-City Composite posted a 10.1% annual gain, up from 9.2% the previous month — beating estimates of a 9.90% year-over-year gain, according to consensus compiled by Bloomberg.

“Home prices finished 2020 with double-digit gains. The trend of accelerating prices that began in June 2020 has now reached its seventh month,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a press statement. He noted that the December annual gain ranks within the top decile of all of its reports, which dates back more than 30 years.

“The market’s strength continues to be broadly-based: 18 of the 19 cities for which we have December data rose, and 18 cities gained more in the 12 months ended in December than they had gained in the 12 months ended in November,” Lazzara said.

Yet again, Phoenix led the 20-City Composite for the 19th consecutive month, posting a 14.4% annual gain. Seattle and San Diego followed posting a 13.6% and 13% year-over-year increase, respectively.

Last year, home prices decelerated in May and June due to the COVID-19 lockdown but that quickly reversed in the summer as historically low interest rates and pent-up demand fueled housing activity.

“Persistent buyer demand amid severely undersupplied housing market has undeniably pushed home prices to new highs in 2020. Continual decline in mortgage rates to new record lows, particularly in December, has also helped expand the affordability box for some buyers and allowed them to bid up prices higher than they would have been able to if rates were higher — also further accelerating price growth,” said CoreLogic Deputy Chief Economist Selma Hepp, in a statement prior to the results. “In looking ahead to 2021, pressure on home prices will likely remain strong until either mortgage rates increase or more homes are available for sale.”

Last week, the National Association of Realtors reported that median existing home sale price rose 14.1% to $303,900 in January from the same time a year ago. It also said the number of homes for sale reached an all-time low in January.

"The housing market remains well supported by low interest rates, tight supply, and a shift in demand towards the suburbs and lower cost cities where homeownership is more accessible," said Nomura in a research note prior to the results. "This should keep up the pressure in home prices."

Amanda Fung is an editor at Yahoo Finance.

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