US home prices surge in June, led by gains in Seattle, Portland

Paterniano Del Favero
Agosto 29, 2017

The S&P CoreLogic Case-Shiller national home price index rose to a seventh consecutive record high in June, rising 5.8% year over year to 192.60. The 10-City Composite remained stagnant with no month-over-month increase.

Portland home prices continue to climb faster than every other major metro area included in the 20-city index except Seattle, which saw prices jump 13.4 percent in the past year.

The Ten-City Composite posted a 4.9% annual increase, down from 5.0% the previous month. Detroit (up 1.4%) and Seattle (up 1.4%) posted the largest month-over-month increases, while Miami (up 0.4%) posted the smallest gain.

Economists had estimated an NSA year-over-year gain in the 20-city index of 5.7%. June represents the three-month average of April, May, and June prices.

"Given current economic conditions and the tight housing market, an immediate reversal in home price trends appears unlikely", Blitzer said.

Home prices have now skyrocketed 78 percent since bottoming out five years ago. Now the months-supply of existing homes for sale is low, at 4.2 months.

Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. "In addition, housing starts remain below their pre-financial crisis peak as new home sales have not recovered as fast as existing home sales".

Rising prices are the principal factor driving affordability down. Wages and salaries are increasing, maintaining a growth rate a bit ahead of inflation. Low mortgage rates have helped keep homeownership within reach for many who might otherwise be priced out, but rates are expected to rebound from their historically low levels.

"High-level data on the US housing market paints a clear picture of a market that continues to put the worst effects of the Great Recession in the rear view - home buying demand is sky high, home prices have been growing for years and the median home in many large markets is worth more than ever", Zillow Chief Economist Dr. Svenja Gudell said in a statement. Since the low of March 2012, home prices are up 46% and 49.6% on the 10-city and 20-city indexes, respectively.

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