Monday, 28 May, 2018

USA house price growth accelerates in November - S&P Case-Shiller

Case Shiller Chicago Year Over Year Chicago area home prices have shown annual gains for 61 consecutive months
Nellie Chapman | 31 January, 2018, 14:00

"Without more supply, home prices may continue to substantially outpace inflation".

United States house price growth accelerated in November, according to the S&P/Case-Shiller National Home Price Index. The indices were all also up year-over-year, by 6.1 percent, 6.4 percent and 6.2 percent, respectively.

The S&P/Case-Shiller 20-city index, meanwhile, increased.7 percent between September and November and rose 6.4 percent year-over year, according to the report, up a modest.1 percent from the previous month.

"From 2010 to the latest month of data, the construction of single family homes slowed, with single-family home starts averaging 632,000 annually", he noted. This is less than the annual rate during the 2007-2009 financial crisis of 698,000, which is far less than the long-term average of slightly more than one million annually from 1959 to 2000 and 1.5 million during the 2001-2006 boom years.

Markets that are seeing the steepest increases remain concentrated on the West Coast. Seattle led the way with a 12.7% year-over-year price increase, followed by Las Vegas with a 10.6% rise and San Francisco with a 9.1% increase.

The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked.

"It's hard to find a place to call home anymore", said Chris Rupkey, chief financial economist at financial firm MUFG. "More supply will be critical to the continued health of the housing market going forward". The national index rose a seasonally adjusted 0.7% for the month, and 6.2% for the year.

The home price index for metro Denver rose 7 percent year-over-year in November, down from a 7.2 percent annual rate measured from July through October. All 20 cities saw price increases after seasonal adjustment.

He said the cause of the increase was not high demand or rising construction costs, but sluggish home building.

November's numbers don't reflect the impact of changes to the tax code passed late past year. Blitzer named San Diego, Los Angeles, Miami and Las Vegas.