The S&P CoreLogic Case-Shiller Home Price Index (HPI) covering all 9 census divisions posted a 6.2% annual gain in September, up from 5.9% in the previous month. The national home price has hit all-time highs in 2017.
The 10-City Composite annual increase came in at 5.7%, up from 5.2% the previous month. The 20-City Composite posted a 6.2% year-over-year gain, up from 5.8% the previous month. The results met the median forecast with the exception of the 20-city monthly gain, which was 0.1% higher than expected.
“Home prices continued to rise across the country with the S&P CoreLogic Case-Shiller National Index rising at the fastest annual rate since June 2014,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Home prices were higher in all 20 cities tracked by these indices compared to a year earlier; 16 cities saw annual price increases accelerate from last month.”
Seattle, Las Vegas, and San Diego posted the highest year-over-year gains, as has been typical this year. In September, Seattle led the way with a 12.9% year-over-year price gains, followed by Las Vegas with an increase of 9.0% and San Diego with an increase of 8.2%. Thirteen (13) cities reported greater price increases in the year ending September 2017 versus the year ending August 2017.
“Strength continues to be concentrated in the west with Seattle, Las Vegas, San Diego and Portland seeing the largest gains,” Mr. Blitzer added. “The smallest increases were in Atlanta, New York, Miami, Chicago and Washington. Eight cities have surpassed their pre-financial crisis peaks.”
Before seasonal adjustment, the national index saw a month-over-month gain of 0.4% in September. The 10-City and 20-City Composites reported increases of 0.5% and 0.4%, respectively.After seasonal adjustment, the index posted a 0.7% month-over-month increase.
The 10-City and 20-City Composites posted 0.6% and 0.5% month-over-month gains, respectively. Fifteen (15) of 20 cities reported gains in September before seasonal adjustment, while all 20 cities reported increases after seasonal adjustment.
“Most economic indicators suggest that home prices can see further gains. Rental rates and home prices are climbing, the rent-to-buy ratio remains stable, the average rate on a 30-year mortgage is still under 4%, and at a 3.8-month supply, the inventory of homes for sale is still low,” Mr. Blitzer said. “The overall economy is growing with the unemployment rate at 4.1%, inflation at 2% and wages rising at 3% or more. One dark cloud for housing is affordability –rising prices mean that some people will be squeezed out of the market.”
The appreciation of home prices and strength in the housing market driven by a stronger labor market and interest rates is one of the biggest economic stories of 2017. The Federal Housing Finance Agency (FHFA) House Price Index (HPI), which was also released Tuesday morning, continued to show gains, as well.