Case-Shiller: U.S. Home Prices Continued to Rise in October

U.S. home prices increased 0.5% in October compared with September and were up 5.5% compared with October 2017, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.

The 10-city composite posted a 0.5% increase, month-over-month, while the 20-city composite posted a 0.4% increase.

Year-over-year, the 10-city composite posted an increase of 4.7%, while the 20-city composite saw an increase of 5.0%.

On an unadjusted basis, the national Index posted a month-over-month gain of 0.1%, while the 10-city and 20-city composites did not report any gains compared with September.

Las Vegas, San Francisco and Phoenix saw the highest year-over-year gains among the 20 cities.

In October, Las Vegas led the way with a 12.8% year-over-year price increase, followed by San Francisco with a 7.9% increase and Phoenix with a 7.7% increase.

Six of the 20 cities reported greater price increases in the year ended October versus the year ended September.

David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, points out that the combination of higher home prices and higher mortgage rates means fewer people can afford to buy a house.

“Fixed rate 30-year mortgages are currently 4.75%, up from 4% one year earlier,” Blitzer says in a statement. “Home prices are up 54%, or 40% excluding inflation, since they bottomed in 2012.

“Reduced affordability is slowing sales of both new and existing single family homes,” Blitzer says. “Sales peaked in November 2017 and have drifted down since then.”

Still, rising home prices have helped lift many areas of the country out of the Great Recession, including Las Vegas, where home prices rose 12.8% in the past year.

“This is a marked change from the housing collapse in 2006-2012, when Las Vegas was the hardest hit city with prices down 62 percent,“ Blitzer says. “After the last recession, Las Vegas diversified its economy by adding a medical school, becoming a regional center for health care, and attracting high technology employers. Employment is increasing three percent annually, twice as fast as the national rate.”

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