Home prices in 20 cities across the United States are holding pace this month, continuing increases in October. Overall, the nationwide property value gauge rose by its biggest margin since the middle of 2014. This is according to S&P CoreLogic Case-Shiller data, which released on Tuesday.
S&P index committee chairman David Blitzer comments, “Home prices and the economy are both enjoying robust numbers. However, mortgage interest rates rose in November and are expected to rise further as home prices continue to outpace gains in wages and personal income.”
Broadly, lean housing inventory continues its upward climb to put pressure on home values at a time when steady hiring has lifted demand. Altogether, this has led to steady property price gains at about 5 percent.
More specifically, though, property value index rose 5.1 percent in 20 cities from October of last year after making a 5 percent gain over the year, through September. Furthermore, the national house price gauge increased 5.6 percent over the year. This marks the biggest gain since July 2014 to reach a record 185.06; a measure which first exceeded the pre-recession peak (2006) in September. Looking at monthly numbers, the seasonally adjusted 20-city index increased by 0.6 percent (which is higher than the anticipated 0.5 percent) from the month before, after making a similar 0.5 percent gain.
Blitzer goes on to say, “Affordability measures based on median incomes, home prices and mortgage rate show declines of 20-30 percent since home prices bottomed in 2012. With the current high consumer confidence numbers and low unemployment rate, affordability trends do not suggest an immediate reversal in home price trends.” He continues, “Nevertheless, home prices cannot rise faster than incomes and inflation indefinitely.”
The 20-city index jump was led by an impressive 10.7 percent gain in Seattle, WA, followed by a 10.3 percent jump in Portland, OR. After a seasonal adjustment, Atlanta, GA, showed the biggest month-over-month growth (at 1.4 percent), also followed by Cleveland, OH, at 1.3 percent. New York showed the slowest year-over-year growth at about 1.7 percent.