Case-Shiller: Home Prices Rose 1.1% In April

Posted by Patrick Barnard on June 30, 2015 No Comments
Categories : Residential Mortgage

U.S. home prices increased 1.1% in April compared to March and were up 4.2% compared to April 2014, according to the S&P/Case-Shiller home price index (HPI) report.

The index's 10-city and 20-city composites posted respective gains of 1.0% and 1.1%, month over month, and were up 4.6% and 4.9% year over year.

Denver, San Francisco and Dallas reported the highest year-over-year gains at 10.3%, 10.0% and 8.8%, respectively.

Las Vegas saw the most rapid appreciation of the major U.S. cities in April: It saw home prices rise 6.3%, year over year, compared to 5.7% in March.

Most cities, however, saw home price gains slow during April, according tothe report. In Boston, for example, home prices saw a year-over-year increase of 1.8% compared to 4.6% in March.

David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, says that although the pace of appreciation has been slowing, the gradual rise in home prices is in line with consumer expectations.

‘A recent national survey published by the New York Fed showed the average expected price increase among both owners and renters is 4.1 percent,’ Blitzer says in a release. ‘Both the current rate of home price increases and the consumers' expectations are a bit lower than the long-term annual price change of 4.9 percent since 1975.

‘These figures, however, do not adjust for inflation,’ he adds. ‘The real, or inflation adjusted, price change since 1975 is one percent per year. Given the current inflation rate of under two percent, real home prices today are rising more quickly than is typical. The three out of five consumers in the survey who see homeownership as a good or somewhat good investment may be thinking in real terms.’

Although recent housing data is positive, tight inventory remains a problem, Blitzer says.

‘The proportion of new construction that is apartments rather than single-family homes remains high,’ he says. ‘In the past year, 34 percent of housing starts were apartments, compared to 22 percent on average since 1975. One aspect of this may be condominiums.’

Blitzer further adds that condo prices in San Francisco, Chicago, Boston and New York ‘are rising faster than single-family homes.’

Yesterday, Black Knight Financial Services released its HPI report showing that U.S. home prices rose 1.0% in April compared to March and were up 4.9% compared to April 2014.

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