Area home prices edged up 0.9 percent in July

The year-over-year price increases accelerated in 14 cities in July, compared with the 12 months ended in June.

Home prices appreciated the most on a year-over-year basis in San Francisco and Denver. Blitzer noted that the index has been rising at an annual rate of at least four percent since September 2012, well above the U.S. inflation rate.

As of July, Phoenix has registered the longest streak of year-over-year home price increases.

“The market is continuing to heal and find its footing in a new environment, one where highly local factors… matter more than national trends”, she said. That’s up from a 4.9 percent annual pace in June. Estimates ranged from increases of 4.5 percent to 6 percent.

On Monday, the National Association of Realtors released a separate report showing that pending home sales pulled back by 1.4 percent in August after climbing by 0.5 percent in July. However, 10 cities outdid the annual increase.

“Most economists view the cooling off as healthy because they note prices in many markets were increasing faster than incomes, making it hard for younger buyers to afford to buy a home”, the WSJ said. Both cities saw greater than 10 percent increases.

The three cities with the largest cumulative price increases since January 2000 are all in California: Los Angeles (138%), San Francisco (116%), and San Diego (115%).

Others, like the sand states that were the “poster children of the housing boom”, in Case-Shiller’s words, are still far from 2006 highs. In addition, residential investment and spending on furniture and household equipment have also surpassed economic growth.

“An interest rate increase by the Federal Reserve, now expected in December by many analysts, is not likely to derail the strong housing performance”, he said. This index compares prices with that of January 2000 and generates a 3-month moving average.

On a monthly reading, the National Index posted a gain of 0.7% month-over-month in July.