Home Prices Continue Upward
Home price gains increased at their fastest annual rate since 2014, setting new records again, S&P Dow Jones reported yesterday in its S&P CoreLogic Case-Shiller National Home Price Indices.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 6.2% annual gain in September, up from 5.9% in August. The 10-City Composite annual increase came in at 5.7%, up from 5.2% the previous month. The 20-City Composite posted a 6.2% year-over-year gain, up from 5.8% the previous month.
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.4% in September. The 10-City and 20-City Composites reported increases of 0.5% and 0.4%, respectively. After seasonal adjustment, the National Index recorded a 0.7% month-over-month increase in September. The 10-City and 20-City Composites posted 0.6% and 0.5% month-over-month increases, respectively. Fifteen of 20 cities reported increases in September before seasonal adjustment, while all 20 cities reported increases after seasonal adjustment.
Seattle, Las Vegas, and San Diego reported the highest year-over-year gains among the 20 cities. In September, Seattle led the way with a 12.9% year-over-year price increase, followed by Las Vegas at 9.0% and San Diego at 8.2%. Thirteen cities reported greater price increases in the year ending September from August.
Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., noted markets that had previously been slow to recover have begun showing resilience.
“All 20 cities tracked showed annual gains,” Vitner said. “Low mortgage rates, falling unemployment and low for-sale inventory suggest price growth has room to run, but affordability raises a red flag.”
“Most economic indicators suggest that home prices can see further gains,” said David Blitzer, Managing Director and Chairman of the Index Committee with S&P Dow Jones Indices. “Rental rates and home prices are climbing, the rent-to-buy ratio remains stable, the average rate on a 30-year mortgage is still under 4%, and at a 3.8-month supply, the inventory of homes for sale is still low. The overall economy is growing with the unemployment rate at 4.1%, inflation at 2% and wages rising at 3% or more. One dark cloud for housing is affordability–rising prices mean that some people will be squeezed out of the market.”
The report said as of September, average home prices for the metro areas within the 10-City and 20-City Composites are back to their winter 2007 levels.
