U.S. home prices rose 5.1 percent in the year to August as home buyers competed for fewer properties, helped by low mortgage interest rates, some wage growth and low unemployment.
The S&P CoreLogic Case-Shiller report published on Tuesday said its 20-city index was up 5.1 percent, after a rise of 5.0 percent in the year to July. The national index has now almost recovered to the record high set in July 2006 before the financial crisis of 2008.
“All 20 cities saw prices higher than a year earlier with 10 enjoying larger annual gains than last month,” David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said.
The acceleration in home price inflation comes after other signs the housing recovery is gaining strength.
Sales of existing U.S. homes increased 3.2 percent in September from August, but the number of homes for sale has fallen nearly 7.0 percent from a year ago, the National Association of Realtors said last week. Just 2.04 million existing homes were for sale in September.
Building of new single-family houses rose 8.1 percent in September, in data published earlier by the Commerce Department, although the annual rate of 783,000 starts remains well below the historical average of more than one million annual rate of new home building.
“Demand is high and enthusiasm for homeownership remains strong, especially among all-important young, minority and would-be first-time buyers,” Svenja Gudell, chief economist at real estate data provider Zillow, said.
Case-Shiller’s national index, after seasonal adjustment, rose 0.6 percent month-over-month in August, while the 10-city and 20-city indexes rose 0.2 percent.
Portland, Seattle and Denver reported the strongest year-over-year increases for the seventh month in a row, with gains of 11.7 percent, 11.4 percent and 8.8 percent, respectively, as buyers were forced out of the expensive Silicon Valley area in California.
After the financial crisis of 2008, home prices plunged 35 percent from their peak in July 2006 until they bottomed out in March 2012. They have since risen to just 7.2 percent below the peak.
U.S. home prices rise 5.1% in August; consumer confidence slips
October 26, 2016 by Leave a Comment