US Home Prices Climbing Steadily

30 Jun 2015 | Author: | No comments yet »

City-by-city look at house prices, as Seattle jumps.

The growth in sales prices for single-family homes slowed to 4.2% in April, carrying on a slowdown that has lasted nearly two years, S&P/Case-Shiller indicated Tuesday.WASHINGTON (MarketWatch) — Here’s a city-by-city look at home prices, after the S&P/Case-Shiller 20-city composite showed that U.S. house prices rose 1.1% in April, supported by the spring sales market.

On a national basis, prices appreciated 4.2% (seasonally adjusted) year-over-year in April compared to 4.3% in March, according to the S&P/Case-Shiller National Home Price Index, which tracks all nine Census divisions. Price growth in major cities was more rapid: an index tracking 20 major U.S. cities gained an annual 4.9% in April; a separate index tracking 10 cities gained 4.6% in April. “Home prices continue to rise across the country, but the pace is not accelerating,” said David M. Blitzer noted that home-buyers have a good grasp of the market; a recent published by the New York Fed showed both owners and renters expect annual price increases of about 4.1%. Adjusting for inflation, the real price change since 1975 is just 1% per year. “Given the current inflation rate of under 2%, real home prices today are rising more quickly than is typical,” Blizter said. “The three out of five consumers in the survey who see home ownership as a good or somewhat good investment may be thinking in real terms.” As of April 2015, average home prices in the 10 and 20 cities the indices track are back to their fall 2004 levels, but about 14-16% off their summer 2006 peaks.

All twenty cities saw price appreciation rise month-over-month in April before seasonal adjustment; after seasonal adjustment, 12 were up and eight were down. Sales of previously-owned homes hit their fastest pace in nearly six years in May, driving prices up by 7.9% year-over-year. “New and existing home sales are both up, and home price growth continues to slow down. The fact that these indicators are moving in opposite directions actually means the market overall is moving in the right direction – back to normal,” said Stan Humphries, Zillow’s chief economist, noting that a bump-up in sales volume is positive, since sales have been sluggish compared to normal levels. “Normal home value growth is usually between 3% and 5% annually, well below growth rates of just a year ago, so the current pace is far more sustainable.

Local market dynamics – rather than larger, national economic trends – are dictating market conditions on the ground in individual communities, as they should. All of these trends signal good news for the market.” Blitzer, of S&P/Case-Shiller, noted that apartment construction remains strong. “In the past year, 34% of housing starts were apartments, compared to 22% on average since 1975.

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