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Wednesday, April 17, 2024
HomeNewsEconomyS&P/Case-Shiller: Home Prices Rise Less than Expected in October

S&P/Case-Shiller: Home Prices Rise Less than Expected in October


Home sales and home prices data and reports. (Photo: REUTERS)

The S&P/Case-Shiller U.S. National Home Price Indices in 20 major U.S. metropolitan areas rose 0.1% in October on a non-seasonally adjusted basis, missing the median forecast of 0.2%.

“Generally good economic conditions continue to support gains in home prices,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Among the positive factors are consumers’ expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts.”

The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 5.2% annual increase in October 2015 versus a 4.9% increase in September 2015, topping expectations for a 5.4% increase.

“Inventories of existing homes have averaged around a five month supply for the past year, a level that suggests a fairly tight market with limited supplies,” Blitzer added. “Sales of new single family homes, despite recent increases in construction, remain mixed to soft compared to the trend in existing home sales.”

The latest data in the S&P/Case-Shiller U.S. National Home Price Index wasn’t influenced by the recent decision by the Federal Reserve to raise short-term interest rates for the first time since the subprime mortgage crisis. However, Blitzer says that consumers and homebuyers shouldn’t get too concerned about the rate hike yet.

“The recent action by the Federal Reserve raising the Fed funds target rate by 25bp and spreading expectations of further increases during 2016 are leading some to wonder if mortgage interest rate might rise. Typically, increases in short term interest rates lead to smaller increases in long term interest rates,” he added. “These data suggest that potential home buyers need not fear runaway mortgage interest rates.”

Meanwhile, San Francisco, Denver and Portland again reported the highest year-over-year increases among the 20 cities with another month of double-digit price increases of 10.9% for all three. Twelve cities reported greater price increases in the year ending October 2015 juxtaposed to the year ending September 2015. Phoenix had the longest streak of yearover-year increases, reporting a gain of 5.7% in October 2015, the eleventh consecutive increase in annual price gains.

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PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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