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Home Prices Continue to Soar in August

Home prices continued to rise across the country in August 2015 as the economy improves and housing demand outweighs supply.

The S&P Dow Jones Indices released its results of for the S&P/Case-Shiller U.S. National Home Price Index (HPI) Tuesday, showing that home prices experienced year-over-year gains of 4.7 percent in August compared to a 4.6 percent increase in July.

According to the index, which covers all nine U.S. census divisions, the 10-City Composite rose 4.7 percent in the year to August compared to 4.5 percent in July, and the 20-City Composite’s year-over-year gain was 5.1 percent, up from 4.9 percent in July.

Among the cities with the highest year-over-year increases were San Francisco, California and Denver, Colorado with home prices gains of 10.7 percent and Portland, Oregon with a gain of 9.4 percent. The HPI report also found that fifteen cities had greater year-over-year price increase in August 2015 compared to July 2015.

On a month-over-month basis, the index rose 0.3 percent in August prior to seasonal adjustment. The 10-City Composite and 20-City Composite increased 0.3 percent and 0.4 percent month-over-month, respectively. After seasonal adjustment, the index rose 0.4 percent from the previous month, while the 10-City and 20-City Composites both increased 0.1 percent.

"Home prices continue to climb at a 4 percent to 5 percent annual rate across the country,” said David M. Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices.

Blitzer also noted that other housing indicators have shown strength recently:

  1. Housing starts topped an annual rate of 1.2 million units in the latest report with continuing strength in both single family homes and apartments.
  2. The National Association of Home Builders sentiment survey, reflecting current strength, reached the highest level since 2005, before the housing collapse.
  3. Sales of existing homes are running about 5.5 million units annually with inventories of about five months of sales.
  4. September new home sales took an unexpected and sharp drop as low inventories were cited as a possible cause."

"A notable part of today’s economy is the continuing low inflation rate; in the year to September, consumer prices were unchanged," Blitzer concluded. "Even excluding food and energy, the core inflation was 1.9 percent. One result is that a 5 percent price increase in the value of a house means more today than it did in 2005-2006, the peak of the housing boom when the inflation rate was higher. The rebound from the recent lows was faster than the 1997-2005 housing boom, and also much less driven by inflation."

View the full report at: https://www.spice-indices.com/idpfiles/spice-assets/resources/public/documents/252950_cshomeprice-release-1027.pdf?force_download=true

 

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