S&P/Case-Shiller: Home Prices Increased 0.1% In November

Posted by Patrick Barnard on January 28, 2016 No Comments
Categories : Residential Mortgage

U.S. home prices increased a mere 0.1% on an unadjusted basis in November compared with October but increased 5.3% compared with November 2014, according to the S&P/Case-Shiller home price index.

On an unadjusted basis, the index’s 10-city composite was unchanged compared with October but increased 5.3% compared with November 2014. The 20-city composite increased 0.1% compared with October and increased 5.8% compared with November 2014.

On an adjusted basis, that national index and both composites increased 0.9%, month over month.

Fourteen of 20 cities reported increases in November before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.

Portland, San Francisco and Denver saw the highest gains, year over year, among the 20 cities. Portland led the way with an 11.1% year-over-year price increase, followed by San Francisco with 11.0% and Denver with 10.9%.

Phoenix had the longest streak of year-over-year increases, reporting a gain of 5.9% in November. It was the 12th consecutive increase in annual price gains for that city. Detroit posted a 6.3% year-over-year price – up from 5.1%, the largest annual increase in November.

“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a statement. “Sales of existing homes were up 6.5 percent in 2015 versus 2014, and the number of homes on the market averaged about a 4.8 months’ supply during the year. Both numbers suggest a seller’s market.

“The consumer portion of the economy is doing well; like housing, automobile sales were quite strong last year,” Blitzer adds. “Other parts of the economy are not faring as well. Businesses in the oil and energy sectors are suffering from the 75 percent drop in oil prices in the last 18 months. Moreover, the strong U.S. dollar is slowing exports. Housing is not large enough to offset all of these weak spots.

“Home prices continue to recover from the collapse that began before the recession of 2007-2009 and continued until 2012,” he continues. “Three cities – Dallas, Denver and Portland – have reached new all-time highs; San Francisco is even with its earlier peak, and Charlotte, N.C., is less than one percent below its previous peak. The S&P/Case-Shiller National Home Price Index is about 4.8% below the peak it set in July 2006 and 29.2% above the bottom it touched in January 2012. By comparison, the S&P 500, as of Friday, Jan. 22, is up 46% from January 2012 – better than the S&P/Case-Shiller National Home Price series and about the same as Los Angeles.”

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