Single-family home prices in the U.S. rose in February on a year-over-year basis fueled by increases in the western region of the country, a closely watched survey said on Tuesday.
“Home prices continue to rise and outpace both inflation and wage gains,” said David Blitzer, chairman of the Index Committee for S&P Dow Jones Indices. “While nationally, prices are recovering, new construction of single family homes remains very weak despite low vacancy rates among both renters and owner-occupied homes.”
The S&P/Case Shiller composite index of 20 metropolitan areas increased by 5 percent in February on a year-over-year basis, outperforming January’s downwardly revised gain of 4.5 percent. The index also beat economists’ expectations of a 4.7 percent gain, according to a Reuters poll of economists.
Denver and San Francisco reported the highest year-over-year gains, with prices increasing by 10 percent and 9.8 percent, respectively, over the last 12 months.
However, as prices offer some good news to a struggling housing market, another index found mortgage risk hitting another high on a year-over-year basis.
The composite National Mortgage Risk Index (NMRI) for Agency purchase loans stood at 11.84 percent in March, up 0.3 percentage point on a year-over-year basis. The risk subindexes for Freddie and the Federal Housing Authority (FHA) both hit series highs in March, while the risk indices for Fannie and the VA were just below their own series highs.
“The lightly capitalized nonbanks have been quite receptive to the push from regulators to expand the credit box,” said Edward Pinto, codirector of AEI’s International Center on Housing Risk. “One must look outside the banking sector to understand the rising risk in mortgage lending.”