USA Home Prices stable rise while sales keep increasing
According to the Florida Realtors news “U.S. home values prolonged their stable rising march in May, spurred by increasing sales and a decreasing supply of accessible houses”.
The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index increased 5.2% in May compared with a year ago. That is down from a 5.4% yearly gain in April but still overhead last summer’s growing rate.
Solid job growth and near-record low mortgage rates are encouraging more Americans to buy homes. Yet greater prices haven’t stimulated more people to list their properties for sale. That is pushing purchasers to race against each other and bid up prices, particularly in coastal cities with strong job growth.
“Sellers are in the driver’s seat, as buyers contend with fierce competition and very fast-moving markets,” Svenja Gudell, chief economist at real estate data provider Zillow, said.
Home values are gradually edging back to their greatest levels reached throughout the housing bubble a decade ago. After falling 35% from 2006 through 2012, the 20-city index is now just 8.8 percent under its peak.
Portland, Oregon, Seattle, and Denver posted the biggest year-over-year gains in May for the fourth straight month. Household values improved 12.5 % in Portland, 10.7% in Seattle and 9.5 percent in Denver.
While the 20 city-index remains below its bubble level, seven cities reached new peaks in April, including Portland, Seattle and Denver as well as Boston, Charlotte, Dallas and San Francisco.
Ralph McLaughlin, chief economist at online real estate service Trulia, points out that home value profits in San Francisco, one of the nation’s most expensive housing markets, lastly seem to be decelerating. They rose 6.5% from a year before, the smallest annual gain in nearly four years.
The housing marketplace has been mostly solid this year, adding to its stable recuperation from the bust that initiated in 2006. Sales of current homes rose 1.1% in June to the uppermost level in more than nine years.
Still, transactions may be held back in the coming months by the lack of available homes. The number of houses for sale has fallen 5.8% in the past year, to 2.12 million, according to the National Association of Realtors.
That constraint could already be having an influence. The number of Americans who engaged contracts to buy homes fell in May, according to the Realtors, and is underneath its year-ago level for the first time in nearly two years.
Builders are breaking ground on more single-family homes, which enhances construction jobs. But the escalation in homebuilding hasn’t lifted the stock of homes enough to slow price gains.
Mortgage rates are near historic lows, which can offset price gains by keeping monthly payments in check. The average 30-year fixed mortgage rate rose to 3.45% last week, according to Freddie Mac. That’s down from 4.04% a year ago.