Home prices jumped 6.3 percent in December, according to the latest data from the S&P CoreLogic Case Shiller U.S. National Home Price NSA Index. The 10-city composite increase was 6.0 percent, unchanged from November. The 20-city composite posted a 6.3 percent year-over-year gain, compared to 6.4 percent the previous month.
On a month-over-month basis, home prices rose 0.2 percent on the National Index and both city composites. After seasonal adjustment, the National Index posted a 0.7 percent gain and both composites a 0.6 percent gain.
Seattle, Las Vegas, and San Francisco were the leaders among the 20-city index with gains of 12.7 percent, 11.1 percent and 9.2 percent, respectively.
“The rise in home prices should be causing the same nervous wonder aimed at the stock market after its recent bout of volatility,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.
“None of the cities covered in this release saw real, inflation-adjusted prices fall in 2017. The National Index, which reached its low point in 2012, is up 38 percent in six years after adjusting for inflation, a real annual gain of 5.3 percent. The National Index’s average annual real gain from 1976 to 2017 was 1.3 percent. Even considering the recovery from the financial crisis, we are experiencing a boom in home prices.
“Within the last few months, there are beginning to be some signs that gains in housing may be leveling off. Sales of existing homes fell in December and January after seasonal adjustment and are now as low as any month in 2017. Pending sales of existing homes are roughly flat over the last several months. New home sales appear to be following the same trend as existing home sales. While the price increases do not suggest any weakening of demand, mortgage rates rose from 4 percent to 4.4 percent since the start of the year. It is too early to tell if the housing recovery is slowing. If it is, some moderation in price gains could be seen later this year.”
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