Home Prices in 20 US Cities Rise at Fastest Pace Since 2014
Home prices in 20 U.S. cities climbed in the 12 months through January at the fastest pace since July 2014, while nationwide the increase in property values also accelerated, according to S&P CoreLogic Case-Shiller data reported March 28.
Key Points
• 20-city property values index rose 5.7% from January 2016 (forecast was 5.6%) after increasing 5.5% in the year through December.
• National home-price gauge increased 5.9% in the 12 months through January.
• Seasonally adjusted 20-city index advanced 0.9% from a month earlier (forecast was 0.7%).
Big Picture
Lean housing inventory helps explain why home prices are appreciating at more than twice the rate of inflation and wage growth, an impediment to an even bigger advance in housing demand. That’s making it difficult for some Americans to transition from renter to homeowner, a reason investors remain a big part of the market as they purchase properties and convert them to rental units.
Economist Takeaways
“Tight supplies and rising prices may be deterring some people from trading up to a larger house, further aggravating supplies because fewer people are selling their homes,” David Blitzer, chairman of the S&P index committee, said in a statement. “The prices also hurt affordability as higher prices and mortgage rates shrink the number of households that can afford to buy at current price levels.”
The Details
• All 20 cities in the index showed year-over-year gains, led by an 11.3% advance in Seattle and a 9.7% increase in Portland, Oregon.
• After seasonal adjustment, Seattle had the biggest month-over-month rise at 1.7%, followed by a 1.3% increase in Chicago; home prices fell 0.1% in Cleveland.
