HOME PRICES EXCEED EXPECTATIONS AT REPEAT ALL-TIME HIGH
Home price growth in February bested analyst predictions, expanding 5.8% in the latest S&P CoreLogic Case-Shiller Indices.
Prices rolled along to a 32-month high in the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, increasing from 5.6% the month prior. The Index’s 10-City Composite rose 5.2%, while its 20-City Composite rose 5.9%. The 10-City Composite shows an increase from 5% the month prior; the 20-City Composite, an increase from 5.7% the month prior. Month-over-month, the 10-City Composite rose 0.3% and the 20-City Composite rose 0.4%.
Of the 20 cities analyzed, Dallas, Texas, overtook recurring top three-ranked Denver, Colo., with prices up 8.8%. Portland, Ore., and Seattle, Wash., remained in the top three, with prices up 9.7% in Portland and up 12.2% in Seattle. The majority of cities analyzed showed higher increases than what was observed the month prior.
According to David M. Blitzer of S&P Dow Jones, the price parade will keep marching on so long as supply trails demand.
“Housing and home prices continue to advance,” said Blitzer in a statement. “The S&P Corelogic Case-Shiller National Home Price Index and the two composite indices accelerated since the national index set a new high four months ago. Other housing indicators are also advancing, but not accelerating the way prices are. According to NAR, sales of existing homes were up 5.6% in the year ended in March. There are still relatively few existing homes listed for sale and the small 3.8-month supply is supporting the recent price increases.”
“Housing affordability has declined since 2012 as the pressure of higher prices has been a larger factor than stable to lower mortgage rates,” Blitzer said. “Housing’s strength and home-building are important contributors to the economic recovery. Housing starts bottomed in March 2009 and, with a few bumps, have advanced over the last eight years. New-home construction is now close to a normal pace of about 1.2 million units annually, of which around 800,000 are single-family homes.”
“Most housing rebounds following a recession only last for a year or so,” said Blitzer. “The notable exception was the boom that set the stage for the bubble. Housing starts bottomed in 1991, drove through the 2000-2001 recession, and peaked in 2005 after a 14-year run.”
(adapted from an S&P Dow Jones report, 4/26/17)
Author: Pete LaBriola,
Keller Williams Realty