The recent Case-Shiller Home Price Index for October reported that home prices continue to grow, rising 5.5 percent year-over-year, and 0.8 percent month-over-month in the 20-city index.
“The combination of a tight supply and strong demand for housing has pushed prices increasingly higher,” says Quicken Loans vice president Bill Banfield. “At some point, more sellers are going to be willing to list their homes and the increased supply will be welcomed by first time home buyers looking for the goldilocks home – fitting their budget and lifestyle.”
The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 5.2 percent annual increase in October 2015 versus a 4.9 percent increase in September 2015. The 10-City Composite increased 5.1 percent in the year to October compared to 4.9 percent previously. The 20-City Composite’s year-over-year gain was 5.5 percent versus 5.4 percent reported in September.
San Francisco, Denver and Portland continue to report the highest year-over-year gains among the 20 cities with another month of double-digit price increases of 10.9 percent for all three. Twelve cities reported greater price increases in the year ending October 2015 versus the year ending September 2015. Phoenix had the longest streak of year-over-year increases, reporting a gain of 5.7 percent in October 2015, the eleventh consecutive increase in annual price gains.
Before seasonal adjustment, the National Index posted a gain of 0.1 percent month-over-month in October. The 10-City Composite was unchanged and the 20-City Composite reported gains of 0.1 percent month-over-month in October. After seasonal adjustment, the National Index posted a gain of 0.9 percent, while the 10-City and 20-City Composites both increased 0.8 percent month-over-month. Ten of 20 cities reported increases in October before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.
“Generally good economic conditions continue to support gains in home prices,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Among the positive factors are consumers’ expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts. Inventories of existing homes have averaged around a five month supply for the past year, a level that suggests a fairly tight market with limited supplies. Sales of new single family homes, despite recent increases in construction, remain mixed to soft compared to the trend in existing home sales.”
For more information, visit www.housingviews.com.