Home Price Increases in 20 US Cities Hold Steady in April
Home prices in 20 U.S. cities rose at a steady pace in April from a year earlier, a sign demand for residential real estate remains solid enough to support both buyers and sellers, data from New York-based S&P/Case-Shiller showed June 28.
Key Points
• Twenty-city property values index increased 5.4% from April 2015 (matching median forecast) after climbing 5.5% in the year through March.
• National home-price gauge rose 5% from 12 months earlier after 5.1% in the year ended in March.
• On a monthly basis, seasonally adjusted 20-city measure increased 0.5% from March, the smallest gain since September (rounded), after climbing 0.8%.
Big Picture
Steadily rising home prices not only boost the incentive for buyers to jump in but also may encourage current owners to put their properties up for sale, helping maintain a healthy churn in the market. Faster wage gains will be needed to give first-time buyers the income needed to keep pace with home prices and extend the lifespan of the residential real estate recovery.
Economist Takeaways
“The home price increases reflect the low unemployment rate, low mortgage interest rates and consumers’ generally positive outlook,” David Blitzer, chairman of the S&P index committee, said in a statement. Still, political concerns caused by Brexit and the upcoming U.S. presidential election “raise uncertainty and will distract home buyers and investors in the coming months.”
“I’ve never had a homeowner complain that their house has gone up in value, but I have had first-time homebuyers complain that prices are going up and keeping them out of the market,” Ralph McLaughlin, chief economist at Trulia in San Francisco, said before the report. “It depends what side of the coin you’re looking at with regards to whether rising home prices are a good thing.”
The Details
• All cities in the index showed a year-over-year gain, led by a 12.3% advance in Portland, Oregon, and a 10.7% increase in Seattle.
• After seasonal adjustment, Detroit had the biggest month-over-month gain at 1%; Cleveland, San Diego and San Francisco posted declines from March.
