Home prices continued trending upward across the country during the last 12 months, according to the S&P/CoreLogic Case-Shiller Indices, which reported a 5.5% annual gain in April – down from 5.6% the month prior.
The 10-city composite annual increase came in at 4.9%, down from 5.2% the previous month. The 20-city composite posted a 5.7% year-over-year gain, which is down from 5.9% in March.
Seattle; Portland, Ore.; and Dallas reported the highest year-over-year gains among the 20 cities. In April, Seattle led the way with a 12.9% year-over-year price increase, followed by Portland, with 9.3%, and Dallas, with 8.4%. Seven cities reported greater price increases for the year ending April 2017 versus year-over-year ending March 2017.
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.9% in April. The 10-city composite posted a 0.8% increase, and the 20-city composite reported a 0.9% increase in April.
After seasonal adjustment, the National Index recorded a 0.2% month-over-month increase. The 10-city composite posted a 0.2% month-over-month increase and the 20-city composite a 0.3% increase. Eighteen of the 20 cities reported increases in April before seasonal adjustment; after seasonal adjustment, 13 cities saw prices rise.
David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, says questions are arising due to home prices rising faster than inflation.
“Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up,” he says. “The increase in real, or inflation-adjusted, home prices in the last three years shows that demand is rising. At the same time, the supply of homes for sale has barely kept pace with demand, and the inventory of new or existing homes for sale shrunk down to only a four-month supply. Adding to price pressures, mortgage rates remain close to four percent, and affordability is not a significant issue.”
The current national index level is 2.1% above its peak of 184.62 set in July 2006, now standing at 188.50 after seeing a dip to 134.00 in February 2012. The 20-city composite is down 4.5% from its July 2006 peak of 206.52, now at 197.19 after hitting 134.07 in March 2012, and the 10-city composite peak of 226.29 in June 2006 is now down to 210.64 after reaching 146.45 in March 2012.
The 20-city composite, which saw all 20 cities post year-over-year gains, includes the following: Atlanta (5.8%); Boston (6.7%); Charlotte, N.C. (6.1%); Chicago (4.0%); Cleveland (3.4%); Dallas (8.4%); Denver (8.2%); Detroit (7.4%); Las Vegas (6.8%); Los Angeles (5.3%); Miami (5.4%); Minneapolis (6.3%); New York (3.8%); Phoenix (5.7%); Portland (9.3%); San Diego (6.6%); San Francisco (5.0%); Seattle (12.9%); Tampa, Fla. (5.0%); and Washington, D.C. (3.6%).