Home-price gains in 20 U.S. cities accelerated in August amid tight inventories and steady economic growth, figures from S&P CoreLogic Case-Shiller showed Oct. 31.
Highlights of August Home Prices
•20-city property values index rose 5.9% year over year (matching estimate) after 5.8%.
•National price gauge increased 6.1% year over year, most since June 2014.
•Seasonally adjusted 20-city index up 0.5% month over month (estimated 0.4%) after 0.4% rise.
Home values have continued to increase steadily across the U.S. as buyers compete for a limited supply of available homes. Asking prices have grown faster than incomes, pushing down homeownership rates across the country.
Those trying to enter the market have felt the price increases most acutely, as a separate report showed first-time buyers of previously owned homes matched the lowest in two years in September.
The aftermath of hurricanes Harvey and Irma will probably mean even higher values because of constricted supplies in Texas and Florida.
That’s on top of unemployment at a 16-year low and still-cheap mortgage costs that support prices and purchases.
“Home-price increases appear to be unstoppable,” David Blitzer, chairman of the S&P index committee, said in a statement. At the same time, “measures of affordability are beginning to slide, indicating that the pool of buyers is shrinking,” and the Fed’s interest-rate hikes are likely to push mortgage rates higher over time, “removing a key factor supporting rising home prices,” he said.
•Seattle (up 13.2%), Las Vegas (up 8.6%), and San Diego (up 7.8%) were the top three cities in terms of year-over-year price appreciation; all cities showed gains of at least 3%.
•After seasonal adjustment, San Diego had the biggest month-over-month increase at 1%, while Atlanta was the only city to show a decline, at 0.2%.