"It's Unstoppable" - US Home Prices Rise At Fastest Pace In Over 3 Years

US national home prices are up 6.07% YoY in August - the fastest rate since June 2014.

We note this data is for August - before the hurricanes.

Seattle (up 13.2 percent), Las Vegas (up 8.6 percent), and San Diego (up 7.8 percent) were the top three cities in terms of year-over-year price appreciation; all cities showed gains of at least 3 percent.

After seasonal adjustment, San Diego had the biggest month-over-month increase at 1 percent, while Atlanta was the only city to show a decline, at 0.2 percent.

Pushing home prices to a new record high...

“Home-price increases appear to be unstoppable,” David Blitzer, chairman of the S&P index committee, said in a statement.

 

At the same time, “measures of affordability are beginning to slide, indicating that the pool of buyers is shrinking,”

 

and the Fed’s interest-rate hikes are likely to push mortgage rates higher over time, “removing a key factor supporting rising home prices,” he said.

In fact, US homes have never been more unaffordable...

 

As every single city's home prices are rising faster than earnings...

Comments

Haus-Targaryen SheepRevolution Tue, 10/31/2017 - 09:30 Permalink

So random suburb outside of Berlin ... partially renovated Soviet house will run you a cool 450.000€.  Expect 130 square meters and a 300 square meter garden. If you want "normal" house prices, then you're looking 50 miles out plus. What does the A+ neighborhoods cost? Well, a 2000 square foot home in Potsdam that doesn't look like Stalin himself personally drew it ... buy in is ballpark €3.3 million. Same house in Grunewald will run you 5 million eur. My wife's cousin bought a house in Strausberg some 10 years ago for €325,000.  They've done light renovations to it. Got it appraised last week, range was between 950.000€ and 1.200.000€. Real estate prices in these major "A" cities are so far removed from reality at this point. 

In reply to by SheepRevolution

JohnGaltUk skbull44 Tue, 10/31/2017 - 09:46 Permalink

This is my best guess; investors\gamblers are dumping paper because as Voltaire wrote, "Paper money eventually returns to its intrinsic value -- zero." This will also include bonds. People are dumping paper for hard assets. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.- Ludwig von Mises

In reply to by skbull44

buzzsaw99 Tue, 10/31/2017 - 09:21 Permalink

and the Fed’s interest-rate hikes are likely to push mortgage rates higher over time... Brilliant, Snape (Blitzer) - once again you've put your keen and penetrating mind to the task and as usual come to the wrong conclusion. [/Sirius Black]

Nature_Boy_Wooooo Tue, 10/31/2017 - 09:30 Permalink

BitHouse......It's a store of value that you can't instantly sell or transfer without an agent. When you sell it you have to buy more of it somewhere else at the same market price or be homeless. You don't actually have any wealth with BitHouse but you can tell your friends "I have xxxxx much in equity. But rest assured it will always increase in theoretical value.

DEMIZEN Tue, 10/31/2017 - 09:55 Permalink

15 years ago in a class i would go like: prof if these trend averages continue a studio in santa monica would cost 5 millions in 2025. and the class was laughing...

scubapro Tue, 10/31/2017 - 11:50 Permalink

  WSJ article yesterday regarding a paper the Fed did....suggesting that a product/mortgage of 100% ltv (for buyers who cant save money to put down b/c rent is too high--dont forget about maintenance!).    100% ltv and the PAYMENT is fixed, but depending on where rates are the payment may put more or less towards equity each month...so a floating rate and you may or may not ever pay off or down the mortgage.after reading it, it sounds like a perfect product...people THINK they are buying a home, but really just pay more in interest forever--this is a perfect product for the next 20 years as rates will be climbing....it will be impossible for people in this type of product to get ahead.  not too different than neg am loans but those can blowup...this one endentures the borrower for life, no chance of reset!