Steel Markets

Case-Shiller Home Price Index at All-Time High

Written by Sandy Williams

Home prices rose 6.1 percent in August for an all-time year-over-year gain in the latest S&P CoreLogic Case-Shiller Home Price Index. The 20-city composite posted a 5.9 percent jump from August 2016.

“Home price increases appear to be unstoppable,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, noting that housing is outpacing the rest of the economy. “Most prices across the rest of the economy are barely moving compared to housing. Aside from oil, the only other major item with price gains close to housing was hospital services, which were up 4.6 percent. Wages climbed 3.6 percent in the year to August.”

The 20-city index on a month-over-month basis gained 0.5 percent with 19 of the 20 cities reporting increases. Atlanta was the only city to slip on the monthly index, down 0.2 percent.

Low mortgage rates combined with an improving economy are supporting home prices, said Blitzer.

“The price gains are not simply a rebound from the financial crisis; nationally and in nine of the 20 cities in the report, home prices have reached new all-time highs. However, home prices will not rise forever,” said Blitzer. “Measures of affordability are beginning to slide, indicating that the pool of buyers is shrinking. The Federal Reserve is pushing short-term interest rates upward and mortgage rates are likely to follow over time, removing a key factor supporting rising home prices.”

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