By Shobhana Chandra
(Bloomberg)—Home prices in 20 U.S. cities rose in September by the most in more than three years, indicating resilient demand at a time of persistently scarce inventory, according to S&P CoreLogic Case-Shiller data released Tuesday.
Highlights of Home Prices (September)
20-city property values index increased 6.2% y/y (est. 6%), most since July 2014, after gaining 5.8% y/y National home-price gauge rose 6.2% y/y Seasonally adjusted 20-city index advanced 0.5% m/m (est 0.3%)
The residential real-estate market is benefiting from steady demand backed by a strong job market and low mortgage rates. The ongoing scarcity of available houses on the market, especially previously-owned dwellings, is likely to keep driving up prices. Eight cities have surpassed their peaks from before the financial crisis, according to the report.
In the past few years, growth in property values has been consistently outpacing wage gains, crimping affordability for younger, first-time buyers. That could eventually become a headwind to faster price appreciation. For now, though, rising property values are also helping to boost home equity and support consumer spending, the biggest part of the economy.
“Most economic indicators suggest that home prices can see further gains,” David Blitzer, chairman of the S&P index committee, said in a statement. “One dark cloud for housing is affordability -- rising prices mean that some people will be squeezed out of the market.”
All 20 cities in the index showed year-over-year gains, led by a 12.9 percent increase in Seattle and a 9 percent advance in Las Vegas Slowest gains in Washington area at 3.1 percent, Chicago at 3.9 percent After seasonal adjustment, all 20 cities showed month-over-month gains; Atlanta had the biggest rise at 1.3 percent, followed by San Francisco with a 1.1 percent increase Separate report from the Federal Housing Finance Agency showed its home-price index climbed 0.3 percent in September from a month earlier after a revised 0.8 percent gain FHFA price index rose 6.3 percent in September from year earlier
--With assistance from Alex Tanzi.To contact the reporter on this story: Shobhana Chandra in Washington at [email protected] To contact the editors responsible for this story: Scott Lanman at [email protected] Vince Golle
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