United States: Home price growth reaches over three-year high in September
November 28, 2017
Home price growth remained buoyant in September, supported by low inventory levels and an upbeat economy. The S&P/Case-Shiller 20-city composite home price index rose 0.4% in September, which mirrored the increase recorded in August. When adjusted for seasonal factors, home prices grew 0.5% from the previous month, in line with August’s increase but marginally above market expectations of a more moderate 0.4% increase.
On a yearly basis, home price growth in September came in at 6.2% (August: +5.8% year-on-year), the highest rate since July 2014. Seattle, Las Vegas and San Diego recorded the largest increases in house prices of the 20 cities in the index, while Washington and Chicago registered the weakest annual price rises.
Commenting on the short-term outlook for home prices, David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, said:
“Most economic indicators suggest that home prices can see further gains. Rental rates and home prices are climbing, the rent-to-buy ratio remains stable, the average rate on a 30-year mortgage is still under 4%, and at a 3.8-month supply, the inventory of homes for sale is still low. The overall economy is growing with the unemployment rate at 4.1%, inflation at 2% and wages rising at 3% or more. One dark cloud for housing is affordability—rising prices mean that some people will be squeezed out of the market.”
Author: David Ampudia, Economist