United States: Home prices grow briskly in February
Home prices continued to head higher in February, with the S&P/Case-Shiller 20-city composite home price index increasing 0.7% on a month-on-month basis. The print followed the 0.3% rise logged in January and came in well above market expectations of a more moderate 0.2% increase. When adjusted for seasonal factors, house prices grew 0.8% from the previous month, matching the increase recorded in the previous month but surpassing market expectations of 0.7% growth in February.
On a year-on-year basis, home prices rose 6.8% in February, above the 6.4% increase recorded in the previous month and the highest figure in over three and a half years. West Coast cities continued to show the fastest home inflation, with Seattle, Las Vegas and San Francisco recording the lion’s share of this month’s expansion. Meanwhile, and similar to last month’s results, Chicago and Washington logged the softest annual increases in prices.
Housing prices are being supported by solid economic momentum and healthy employment gains, which are boosting demand for real estate. Home price appreciation is also expected to continue over the short term, as strong demand is compounded by low inventory levels and low vacancy rates among owner-occupied housing.