United States: Housing prices jump to nine-month high in March
May 31, 2016
The S&P/Case-Shiller 20-city home composite index jumped 0.9% in March over the previous month, which came in well above the 0.2% increase recorded in February and overshot the 0.8% increase the markets had expected. In fact, March’s print marked the fastest monthly increase since June 2015. When adjusted for seasonality, the index also rose 0.9% in March over the previous month (February: +0.7% month-on-month).
On a year-on-year basis, the increase in home prices was 5.4% in March, mirrored a reading in February. S&P stated that 10 of 20 cities registered higher prices in March. Portland, Seattle and Denver continue to be the cities with the greatest increases, with another month of double-digit growth in prices.
According to S&P, “Home prices are continuing to rise at a 5% annual rate, a pace that has held since the start of 2015,” while it added that, “The economy is supporting the price increases with improving labor markets, falling unemployment rates and extremely low mortgage rates. Another factor behind rising home prices is the limited supply of homes on the market. The number of homes currently on the market is less than two percent of the number of households in the U.S., the lowest percentage seen since the mid-1980s.”
Author: Ricardo Aceves, Senior Economist