Home prices continued to trend up in November 2016, increasing 5.6 percent annually and 5.5 percent from October, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. The ongoing upward trajectory, says S&P Dow Jones Indices Index Committee Chairman and Managing Director David M. Blitzer, indicates prices have recovered since the recession.
“With the S&P CoreLogic Case-Shiller National Home Price Index rising at about 5.5 percent annual rate over the last two-and-a-half years and having reached a new all-time high recently, one can argue that housing has recovered from the boom-bust cycle that began a dozen years ago,” said Blitzer in a statement. “The recovery has been supported by a few economic factors: low interest rates, falling unemployment, and consistent gains in per-capita disposable personal income.”
The Index’s 10-City Composite increased 4.5 percent annually in November, up from 4.3 percent in October; the 20-City Composite increased 5.3 percent annually, up from 5.1 percent in October.
Prices increased most in Denver, Portland and Seattle—three markets leading the price parade. Seattle posted a 10.4 percent increase in the Index, while Portland posted a 10.1 percent increase, and Denver, an 8.7 percent increase. Home values in Portland and Seattle dominated in 2016, with Zillow reporting Portland at 13.8 percent annual appreciation and Seattle at 12 percent annual appreciation.
“The new administration in Washington is seeking faster economic growth, increased investment in infrastructure, and changes in tax policy which could affect housing and home prices,” Blitzer said. “Mortgage rates have increased since the election and stronger economic growth could push them higher. Further gains in personal income and employment may increase the demand for housing and add to price pressures, when home prices are already rising about twice as fast as inflation.”
“The national Case-Shiller Index posted a new high in November thanks to continued low home inventory,” says Bill Banfield, vice president at Quicken Loans. “Enthusiastic buyers have pushed prices up while torpedoing affordability—especially for first-time buyers. This trend is likely to continue until home-building and -listing catches up with buyer demand.”
Demand has markedly kept up in January, typically the off-season for housing activity. Recent realtor.com® data show the portal’s inventory moving 4 percent faster annually this month, and its median list price is at a record-high. Single-family construction, according to the National Association of Home Builders (NAHB), is expected to grow gradually by 10 percent in 2017.
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