Home prices continued to climb in September, setting a new all-time record and surpassing the highs from before the financial crisis.
On a national basis, single-family home prices increased by 5.5%, according to the S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions. That’s up sharply from 5.1% the month before.
“The new peak…will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.
Home prices have risen particularly fast out West, with the highest year-over-year price increases in Seattle (11%), Portland (10.9%) and Denver (8.7%). Meanwhile, in cities like Miami, Tampa, Phoenix and Las Vegas, home prices have risen but remain significantly below their record highs.
Amid climbing home prices, tight inventory and intense demand, it’s been a tough time to be a buyer. This has forced many people, especially first-time homeowners, to continue renting longer than they would like to.
“It isn’t smart to confuse this full recovery in housing prices with a full recovery in the housing market overall,” said Svengja Gudell, chief economist at Zillow. “Big imbalances still exist between renters and homeowners, and home buyers and home sellers.”
One thing that buyers have enjoyed for so many years are ultra-low mortgage rates. However, as the Fed continues to evaluate the timing of its next rate hike, rates are expected to rise gradually. After Trump’s election, the rate on a 30-year mortgage jumped from 3.3% to over 4%.
An index measuring 20 cities shows that home prices increased an annual 5.1% in September, while a separate 10-city index shows that home prices gained 4.3%.
Seasonally adjusted, the national index rose 1% in September from the month before, while the 20-city index and 10-city index both rose 0.8%.
www.forbes.com
Author: Lauren Gentler, Forbes Staff
