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Home Prices Continue Upward Trend

Written by Sandy Williams

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index gained 5.9 percent in July following a 5.8 percent gain in June. The 20-City Composite posted a 5.8 percent year-over-year gain in the latest report, up from 5.6 percent the previous month.

A modest inventory is allowing sellers to boost prices as competition for available homes intensifies. Prices accelerated the most in Seattle, Portland and Las Vegas, with year-over-year gains of 13.5 percent, 7.6 percent and 7.4 percent, respectively.

The 20-City Composite posted a 0.3 percent month-over-month increase. All 20 cities reported increases in July before seasonal adjustment and 17 cities after seasonal adjustment.

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“Home prices over the past year rose at a 5.9 percent annual rate,” says David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Consumers, through home buying and other spending, are the driving force in the current economic expansion. While the gains in home prices in recent months have been in the Pacific Northwest, the leadership continues to shift among regions and cities across the country. Dallas and Denver are also experiencing rapid price growth. Las Vegas, one of the hardest hit cities in the housing collapse, saw the third fastest increase in the year through July 2017.

“While home prices continue to rise, other housing indicators may be leveling off,” he continued. “Sales of both new and existing homes have slipped since last March. The Builders Sentiment Index published by the National Association of Home Builders also leveled off after March. Automobiles are the second largest consumer purchase most people make after houses. Auto sales peaked last November and have been flat to slightly lower since. The housing market will face two contradicting challenges during the rest of 2017 and into 2018. First, rebuilding following hurricanes across Texas, Florida and other parts of the South will lead to further supply pressures. Second, the Fed’s recent move to shrink its balance sheet could push mortgage rates upward.”

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