Home Prices Aren't Rising At An 'Alarming' Rate, Says S&P/Case-Shiller

"In comparing current home price movement to history, it is necessary to adjust for inflation", he said.

The 10-City Composite posted a 4.9 percent annual increase, up from 4.4 percent in the previous month, while the 20-City Composite recorded a year-over-year gain of 5.6 percent, up from 5.2 percent in November. That's up from 5.6% the month before.

According to David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, 'questions about whether this is a normal housing market or if prices could be heading for a fall are natural'.

"Home prices are rising, but the speed is not alarming", Blitzer wrote. Seattle led the way with a 10.8% year-over-year price increase in December, followed by Portland with 10.0%, and Denver with an 8.9% increase.

While Mr. Blitzer said the rate of appreciation is much higher than the average pace of 1.3% since 1975, it remains within the range economists consider normal. "Only an increase in inventory can soften the price pressure".

Prices in Palm Beach, Broward and Miami-Dade counties increased by 6.8 percent in December from a year ago, according to the S&P CoreLogic Case/Shiller housing index released Tuesday.




The moderation in U.S. bond yields has halted the increase in mortgage rates which should provide some further support to the housing sector and low inventory levels will also support prices in the short term.

US single-family home prices accelerated at a faster pace than expected in December on the back of a low inventory of housing stock, a survey showed on Tuesday.

Blitzer noted that new hope sales were higher than in recent years, at 555,000 in 2016, but still under the average pace of 700,000 since 1990. The average interest rate on all mortgage loans was 4.17 percent, up 26 basis points from 3.91 in December, while the average interest rate on conventional, 30-year, fixed-rate mortgages of $424,100 or less was 4.37 percent, up 29 basis points from 4.08 in December. In the boom-bust of 2005-2009, prices of low, medium, and high-tier homes moved together, while in other periods, including now, the tiers experienced different patterns.

The graph below shows the longer term trend in the Case Shiller Chicago home price index. In fact, single family home prices are still 19.3% below the peak and condo prices are 14.2% below peak.

December's numbers reflect the peak of a sharp rise in mortgage rates following the US election.

(Copyright © 2015. All Rights Reserved.)
 
Recommended

Perth Adele impersonator joins her idol for onstage selfie and singalong
The Grammy and Oscar victor could add stand-up comedian to her talents, as she delighted the crowd with several amusing anecdotes. Singer Adele was left starstruck when she pulled a drag queen impersonator onstage with her and handed over the microphone.

Nintendo Switch game 'VOEZ' requires a touchscreen, is portable-only
Nintendo may bring a brand new "Animal Crossing" game to its upcoming console, the Nintendo Switch , according to numerous hints. Ultimately, only time will tell if this ends up making, breaking or being irrelevant to the Switch's overall lifespan.

Iran requests 950 tons of uranium from Kazakhstan
It said that Iran has stockpiled roughly half of the enriched uranium allowed under the nuclear agreement. The final batch of a shipment of 149 tons of natural uranium was delivered early this month.

Katy Perry & Orlando Bloom Split, Taking a 'Loving' Break
Moreover, sources revealed that Erin swapped her place card just to sit near the actor. Engagement rumors were constantly part of Katy and Orlando's year of romance.

Mets to keep David Wright from throwing because of shoulder impingement
Reyes posted a.267/.326/.443 slash with 25 extra base hits, including eight home runs, in 60 games last season. Another baseball season is upon us, and unfortunately, so is another David Wright injury.

Better days will come, Ginsburg says in interview
Ginsburg has earned the nickname "Notorious RBG" for never being shy about granting interviews or speaking her mind. Ginsburg spurred controversy previous year when she called Trump a "faker" and said he "really has an ego".

Le'Veon Bell franchise tagged Monday
Negotiations on a long-term deal are expected to continue and terms could be agreed upon before the start of the 2017 season. The Steelers have never used the exclusive franchise tag , which blocks Bell from negotiating with other teams.

Trump prepares to issue new travel ban
Four officials said to the news agency that the decision followed pressure from the Pentagon and State Department. A senior administration official told CNN that they don't want to undercut coverage of the president's speech.

Amal Clooney's baby bump upstages George
The sighting marks the couple's first red carpet appearance since news broke earlier this month of their pregnancy. Amal , who never disappoints with her style, stepped out with George in a back and white ensemble on Saturday.

Police shoot man who 'drove into people' in German city of Heidelberg
Police officers stand guard near the attacked Christmas market in Berlin, capital of Germany, on December 21, 2016. He tried to flee and was shot by police officer who were giving chase officers, according to local police.

Transgender wrestler's state bid spotlights Texas policy
Beggs is transitioning from female to male and wants to wrestle boys according to his grandmother, but UIL rules won't let him. In the lawsuit against the UIL , it claims allowing Beggs to compete puts other girls at an "imminent threat of bodily harm".

Police sharpshooter accidentally opens fire during French President Hollande's speech, two injured
A police sharpshooter accidentally shot two people while French President Francois Hollande was delivering a speech Tuesday. Mr Hollande was speaking at the opening of a high speed rail service between Tours and Bordeaux when the shot was sacked .

ECO summit to help advance economic prosperity in region: PM
The Turkish president also underscored the need for greater cooperation in agriculture, environment and tourism. "First of all, we have to take steps to increase intra-trade among member states.

David Moyes relishing his Everton return with Sunderland
I wanted them to take the ball a bit more and be braver in the second half and I thought we did that. Romelu Lukaku in particular seems to be on a hot streak, scoring 9 goals in his last 10 games.

Doctors issue new warning about marijuana
In the USA , many parents believe that pot use is harmless and it could not affect their children. The adverse effects of marijuana have been well documented.


More News

News
More News