Home Prices Continue to Rise, Seattle Leads

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National home values continued to appreciate, with some home price indices continuing to set new records. While Seattle continued to lead the price gains, the nation’s capitol hasn’t fared so well.

In November 2017,
the Case-Shiller 20-City Composite Home Price Index was reported to be 204.21. That was just over 1 percent short of its July 2006 record high and 52 percent above its March 2012 low.

The index, which is
a value-weighted average of 20 metropolitan area indices, ascended 0.2 percent from the prior month. Compared to the same month in 2016, the 20-city index has escalated 6.4 percent.

S&P Dow Jones Indices and CoreLogic Inc. reported the index Tuesday.

David M. Blitzer,
managing director and chairman of the index committee at S&P Dow Jones Indices, explained in the report that home prices are rising at three times the rate of inflation, and demand is not the primary factor. While rising construction costs have had an impact, the slow pace of home building is the primary culprit.

“Without more supply, home prices may continue to substantially out pace inflation,” Blitzer said.

Among the 20 cities tracked in the index, Seattle has seen prices soar from November 2016 by 12.7 percent —
the most of any area. Next was 10.6 percent in Las Vegas, 9.1 percent in San Francisco, 7.4 percent in San Diego and 7.1 percent in Tampa, Florida.

With only a 3.3 percent year-over-year rise, the District of Columbia fared worst among the 20 cities. One possible factor in Washington’s low rate is the domination of the GOP in all branches of government — as Republicans typically seek to shrink the size of the government.

The HPI from the Federal Housing Finance Agency was 256.0, rising 0.4 percent from October and climbing 6.5 percent from November 2016.

In FHFA’s report, which is derived from home sales prices on Fannie Mae and Freddie Mac loans, home values in the Mountain Region were up from a year earlier by 8.9 percent — the most of the nine census divisions tracked. The Pacific Region was close behind at 8.6 percent.

In the Middle Atlantic region, prices were up just 4.2 percent — the smallest gain of any region.

The Black Knight HPI had November’s average U.S. home value at $283,000 — an 0.3 percent month-over-month gain, a 6.4 percent year-over-year increase and the highest average on record. Black Knight’s data indicate that home prices are 42.1 percent higher than the trough reached in January 2012.

The report, released
Monday, indicated that home prices have had year-over-year gains for 67 consecutive months.

Compared to October 2017, home prices in New York rose 1.4 percent — the most of any state — according to Black Knight. Next was Nevada’s 0.8 percent, then Vermont’s 0.7 percent, Arizona’s 0.63 percent and Utah’s 0.62 percent.

With an 0.4 percent drop from the previous month, Wisconsin had the worst record.

On Jan. 2, CoreLogic Inc. reported that national home prices were up 1 percent from October to November.
In last month’s report, CoreLogic estimated that prices were down 0.2 percent for the same period. It was the second consecutive month CoreLogic estimated a decline before reporting that prices actually rose.

CoreLogic said home prices increased 7 percent between November 2016 and November 2017.

Between November and December of this year, CoreLogic estimates prices fell 0.4 percent. By November of this year, prices are expected to rise 4.2 percent from November 2017.

Mortgage Expert

Mortgage Daily Staff



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