Home prices in 20 U.S. Cities rose 5 percent in July from the same month in 2014, propelled by improving demand and limited supply.
Year-to-year increases in the S&P/Case-Shiller index has hovered in a narrow range around 5 percent since February, indicating the rebound in residential real estate is stable. The median estimate of most economists’ surveyed called for a 5.2 percent year-over-year gain, while estimates ranged from increases of 4.5 percent to 6 percent Nationally, prices rose 4.7 percent over the 12-month period.
The marginal inventory of homes on the market is underpinning property values, while historically low mortgage rates are helping keep real estate within reach for many home buyers.
Steady job gains, rental inflation and an easing of still-tight credit standards also should help prospective buyers find the wherewithal to make a purchase.
Home prices are rising, but not at a rate that’s necessarily damaging to affordability and confidence in the market and the market overall is doing quite well.
The S&P/Case-Shiller index is based on a three-month average, which means the July figure was influenced by transactions in June and May. Home prices in the 20-city index adjusted for seasonal variations dropped 0.2 percent in July from the prior month, matching the June’s decline.
All 20 cities in the index showed a year-over-year advance, led by a 10.4 percent increase in San Francisco and a 10.3 percent advance in Denver.
The smallest gain was in Washington, where property values climbed 1.7 percent.
The year-over-year price increases accelerated in 14 cities in July, compared with the 12 months ended in June.
Boston showed the biggest pickup, while Phoenix posted its eighth consecutive annual gain, the longest streak by any of the 20 cities.
Measured against a month earlier, property prices fell in 10 of the 20 cities in July and were unchanged in one, according to the seasonally adjusted data. Home values in San Diego, which were up 0.8 percent, showed the largest monthly increase, while Chicago registered the biggest decline — down 1.2 percent.
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