United States: Home prices record largest gain on record
June 25, 2013
In April, the unadjusted S&P/Case-Shiller 20-city home price composite index rose 2.5% over the preceding month, overshooting market expectations which had the index rising only 1.1% and hitting the largest rise since the Case-Shiller index began. The reading followed a 1.4% increase in March.
On an annual basis, home prices rose 12.1% over the same month last year, which marks an improvement over the 10.9% rise recorded in March. The figure represents the largest pick-up in home prices since March 2006. However, despite the strong increases seen in the past months, prices still remain 26.1% below the peak registered in July 2006.
S&P remained very optimistic, as home prices continue to show solid gains across all 20 cities surveyed for the fifth month in a row. Moreover, the agency specified that recent comments from the Fed on the tapering of QE and the following increase in bond yields have spread fears that increasing mortgage rates could pose a risk to the housing market. It underlined, however, that home buyers have faced similar situations in the past by switching from fixed rate mortgages to adjustable rates.