U.S. home prices increased 0.8%, on an adjusted basis, in September compared with August and increased 5.5% compared with September 2015, bringing the average price for a single-family home back to where it was prior to the Great Recession, according to the S&P Corelogic Case-Shiller National Index.
After seasonal adjustment, the 10-city composite posted a 0.2% month-over-month increase, while the 20-city composite reported a 0.4% month-over-month increase.
Before seasonal adjustment, home prices increased 0.4% in September compared with August, while the 10-city and 20-city composites each increased 0.1%.
The news that home prices have recovered the ground lost during the Great Recession rippled through the industry on Tuesday.
“The new peak set by the S&P Case-Shiller CoreLogic National Index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a statement. “Although seven of the 20 cities previously reached new post-recession peaks, those that experienced the biggest booms – Miami, Tampa, Phoenix and Las Vegas – remain well below their all-time highs. Other housing indicators are also giving positive signals: Sales of existing and new homes are rising, and housing starts at an annual rate of 1.3 million units are at a post-recession peak.”
However, it is unlikely the trend will continue – at some point, perhaps in the next year, home prices will begin to fall again. Blitzer adds, “We are currently experiencing the best real estate returns since the bottom in July of 2012, when prices rose at a 5.9 percent real annual rate. Given history, this trend is unlikely to be sustained.”
Seattle; Portland, Ore.; and Denver reported the highest year-over-year gains among the 20 cities over each of the last eight months. In September, Seattle led the way with an 11.0% year-over-year price increase, followed by Portland with 10.9%, and Denver with an 8.7% increase. Twelve cities reported greater price increases in the year ended Sept. 30 versus the year ending August.