The latest reports show that US home prices increased steadily in February, moving as a result of fewer properties being available to home buyers.
Indeed, the Standard & Poors CoreLogic/Case-Shiller index of home prices across 20 major US cities climbed nearly 6 percent over last year (up from 5.7 percent the year prior) on a non-seasonally adjusted basis. As a matter of fact, the 5.8 percent rise in the national home price index, posted in February, is the biggest jump in 32 months.
This reading came in slightly above Wall Street’s expectations for a 5.8 rise, though prices are up 0.7 percent month-over-month, showing a seasonally-adjusted number that aligns with forecasts. This data precisely highlights the tight supply of homes available on the market right now, and at a time when low mortgage rates and steady asset prices have been lifted.
All 20 of these cities listed in the index showed year over year gains, led largely by a 12.2 percent increase in Seattle, WA and followed by a 9.7 percent increase in Portland, OR. Taking seasonal adjustments into account, Seattle showed the biggest month over month rise—at nearly 2 percent—followed by Dallas, this time, with a month over month increase of 1.2 percent. Indeed, the biggest annual price gains were reported in these cities (Seattle, Portland, and Dallas).
As such, Standard & Poors Dow Jones Indices chair of the index committee, David Blitzer, notes, “There are still relatively few existing homes listed for sale and the small 3.8 month supply is supporting the recent price increases.” He adds, “Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable-to-lower mortgage rates.”
In addition, First American chief economist Mark Fleming echoed the sentiment, noting, “the lack of homes listed for sale is causing unadjusted house price growth to remain strong.”
Yes, home sales started 2017 strong; in fact, these numbers reached their highest level in probably ten years, last month. Furthermore, a better predictor of sales on newly-built homes for last month is due in a report that should be released at some point today, too.