Home prices rise at fastest annual rate since August 2014: S&P/Case-Shiller

Prices in Chicago and Washington, District of Columbia rose less than 2 per cent. The 20-city index remains 11.5 per cent below its peak in July 2006, with metro areas such as Cleveland, Detroit, Miami, Minneapolis and Tampa still significantly below their pre-recession highs.

Prices dipped 0.2 percent in October, although Atlanta’s average was still 6.1 percent higher than a year earlier according to Tuesday’s report from the latest report from S&P/Case-Shiller. Chicago showed the smallest increase, at 1.3 percent. Average prices rose 5.5 percent annually. Only San Francisco (10.9 percent), Denver (10.9 percent), Portland (10.9 percent), Dallas (9.3 percent) and Seattle (8.8 percent) saw faster annual growth. The national index rose 5.2% year over year, up from an increase of 4.9% in September.

“Generally good economic conditions continue to support gains in home prices”, said David Blitzer, head of the Index Committee at S&P Dow Jones Indices, in a statement. Among the positive factors are consumers’ expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts.

Blitzer said that the Federal Reserve’s decision two weeks ago to begin raising interest rates was not expected to push up historically low mortgage rates quickly.

Nationally, October home prices increased over the month in all 20 metropolitan areas surveyed, with the overall index rising by 0.8 percent after adjustment for seasonal fluctuations.

Homebuilder confidence slipped this month, sales of existing homes fell in November amid regulatory changes and purchases of new homes last month sold at a slower pace than projected.

Analysts say the Case-Shiller index is one of the best measures of home values because it tracks the price of the same house over time.

Still, higher prices are keeping many would-be buyers out (http://www.marketwatch.com/story/existing-home-sales-sink-105-on-new-regulations-tight-supply-2015-12-22)of the market.