Despite a slew of disappointing sales (new, existing, and pending), Case-Shiller reports national home prices rose 5.94% YoY - the fastest rise since June 2014 - hitting a new record high (now over 5% above 2006's peak).
It has now been 36 straight months that the S&P CoreLogic Case-Shiller 20-City Compoosite home price index has risen at approximately 5 to 6% annually and it has been 62 months without any YoY price drops...
Gains in New York and Los Angeles dominated the annual performance.
As Bloomberg highlights, buyers are competing for a limited number of for-sale homes, allowing sellers to boost asking prices. Property values are consistently outpacing wage growth, helping explain why the share of first-time buyers of previously owned homes in August was at a one-year low. At the same time, owners’ equity as a share of total real-estate holdings climbed in the second quarter to the highest level in 11 years.
Home prices may also get a boost in coming months after hurricanes Harvey and Irma reduced housing supply in parts of Texas and Florida. Affordability may remain challenging, as both sales and construction are interrupted by clean-up efforts. At the same time, a strong labor market and low-borrowing costs continue to encourage hopeful homebuyers.
While home prices continued to advance strongly along the northwest part of the country, values were also picking up in Denver, Dallas and Las Vegas -- underscoring a broadening of appreciation throughout the U.S.
Las Vegas, one of the hardest-hit cities during the housing collapse, registered the third-largest year-over-year advance in July.
“While the gains in home prices in recent months have been in the Pacific Northwest, the leadership continues to shift among regions and cities across the country,” David Blitzer, chairman of the S&P index committee, said in a statement.
“Rebuilding following hurricanes across Texas, Florida and other parts of the south will lead to further supply pressures.”