The S&P/Case-Shiller home price index for August rose sharply, compared with the July index and house prices were higher on an annual basis as well. The national composite rose 0.9% on both the 10- and 20-city composite indexes. Only Seattle on the 20-city index posted a month-over-month decline in house prices.
Compared with July house prices, the 20-city composite posted annual returns of 1.2% while the 10-city composite rose 0.6%. Only two cities in the 20-city composite posted an annual decline — Chicago and Dallas.
The chairman of the S&P index committee said:
Home prices continued climbing across the country in August. … The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market. News on home prices confirms other good news about housing. Single family housing starts are 43% ahead of last year’s pace, existing and new home sales are also up, the inventory of homes for sale continues to drop and consumer mortgage default rates are reaching new lows. Further consumer confidence continues to rise.
House prices have declined nearly 60% in Las Vegas since mid-2007, but only 5.8% in Dallas during the same period. These two are both included in the 20-city composite index.
The higher prices are at least partly due to lower inventories, especially of foreclosed properties. As new construction begins to increase, prices should continue to climb.