US Home Prices Surge At Fastest Pace Since July 2014

As the latest housing data shows an uptick in sales, Case-Shiller's 20-City Composite index surged 6.19% YoY in September - the fastest rate of gain since July 2014.

As Bloomberg notes, the residential real-estate market is benefiting from steady demand backed by a strong job market and low mortgage rates. The ongoing scarcity of available houses on the market, especially previously-owned dwellings, is likely to keep driving up prices.

Eight cities have surpassed their peaks from before the financial crisis, according to the report.

All 20 cities in the index showed year-over-year gains, led by a 12.9 percent increase in Seattle and a 9 percent advance in Las Vegas (slowest gains in Washington area at 3.1 percent, Chicago at 3.9 percent)

In the past few years, growth in property values has been consistently outpacing wage gains, crimping affordability for younger, first-time buyers.

That could eventually become a headwind to faster price appreciation. For now, though, rising property values are also helping to boost home equity and support consumer spending, the biggest part of the economy.

“Most economic indicators suggest that home prices can see further gains,” David Blitzer, chairman of the S&P index committee, said in a statement.

 

“One dark cloud for housing is affordability - rising prices mean that some people will be squeezed out of the market.”