House Price Increases at Six-Year High

home prices
Source: Thinkstock
The S&P/Case-Shiller home price index for January was higher for the 10th consecutive month. The 20-city composite rose 8.1% year-over-year, slightly below the consensus estimate for a gain of 8.2%, but above the December increase of 6.8%. The 10-city index rose 7.3% in January.

On a month-over-month basis, January prices were up 0.2% on the 10-city composite index and 0.1% on the 20-city composite. From their peaks in June/July 2006, both the composite indexes are down about 29% to 30% through January.

The chairman of the S&P index committee said:

The two headline composites posted their highest year-over-year increases since summer 2006. This marks the highest increase since the housing bubble burst. … Economic data continues to support the housing recovery. Single-family home building permits and housing starts posted double-digit year-over-year increases in February 2013. Despite a slight uptick in foreclosure filings, numbers are still down 25% year-over-year. Steady employment and low borrowing rates pushed inventories down to their lowest post-recession levels.

Phoenix continues to lead the recovery in house prices, up 23.2% year-over-year, and every metropolitan area in the 20-city composite posted a positive year-over-year change in January. San Francisco (17.5%), Las Vegas (15.3%) and Detroit (13.8%) trailed Phoenix in price recovery.

On a month-over-month basis, however, house prices dropped in eight cities: Chicago (0.9%), Detroit (0.9%), Washington, D.C. (0.7%), San Diego (0.6%), Cleveland (0.5%), Minneapolis (0.5%), Portland (0.4%) and Seattle (0.3%).

The full press release is available here.

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