US Home Prices Up in December, Fastest Pace in a Year
US home prices rose in December, this as prospective buyers bid against each other for a limited supply of property.
The Standard & Poor’s CoreLogic Case-Shiller 20-City home price index, released Tuesday, increased 5.6%, the most since January 2016.
The price gainer reflects the healthy pace of home sales. Steady job gains and growing consumer confidence have encouraged more people to take the plunge and look for a home.
This all in contrast was to what Democratic politicians are spouting in national TV interviews.
Mortgage rates have risen since last fall, and with prices also increasing, homes are becoming less affordable. A measure of pending home sales declined in January, a sign that final sales may soon fall as well.
Several Western cities continued to see the fastest increases nationwide: Prices in Seattle jumped 10.8 percent in December from a year earlier, while they rose 10% in Portland and 8.9% in Denver.
The Case-Shiller index covers roughly 50% of US homes.
The index measures prices compared with those in January 2000 and creates a 3-month MA (moving average). The December numbers are the latest available to the market.
The Director of the index committee at S&P Dow Jones, said that adjusted for inflation, home prices nationwide rose 3.8% last year. That’s higher than the average annual rate of 1.3 percent since 1975, but within normal historical ranges, he added.
“Home prices are rising, but the speed is not alarming,” he said.
Mortgage rates could upend the mostly healthy trends in housing in the coming months. The rise in home sales last month may have reflected a rush of buyers trying to get ahead of higher borrowing costs.
The interest rate on the 10-year Treasury note and mortgage rates have increased since the presidential election, as investors anticipate faster growth and inflation under President Donald Trump. The average 30-year fixed mortgage rate was 4.16% last week, about 0.50 higher than last year’s average of 3.65%.
That’s still historically low. The 30-year rate has averaged 6.4% since Y 1990