October Home Prices Set Another New All-Time High: S&P/Case-Shiller

The S&P/Case-Shiller national home price index rose to a record high of 185.06 in October, surpassing the previous high of 184.80 set in September.

In all 20 U.S. cities included in the S&P/Case-Shiller 20-city home price index, October house prices increased year over year, and 15 of 20 also posted month-over-month increases. Seattle (up 10.7%), Portland (up 10.3%) and Denver (up 8.3%) posted the largest year-over-year gains. San Francisco (up 0.6%) and Miami (up 0.5%) posted the largest month-over-month increases, while Chicago (down 1.1%) and New York and Detroit (down 0.2%) posted the largest declines.

The S&P/Case-Shiller home price index for October increased by 5.1% year over year for the 20-city composite index and by 4.3% for the 10-city composite index. The national index rose 5.6% year over year, up from a month-over-month increase of 5.4% in September.

The smallest year-over-year gains came in New York (up 1.7%) and Washington, D.C. (up 3.4%).

Economists had estimated a non-seasonally adjusted gain in the 20-city index of 5.1%.

The index tracks prices on a three-month rolling average. October represents the three-month average of August, September and October prices.

Before seasonal adjustment, the month-over-month National Index showed a gain of 0.2%, the 10-City Composite was unchanged and the 20-City Composite posted rose 0.1%. After seasonal adjustment, the month-over-month gains were 0.9% on the National Index, 0.6% on 20-City Composite and 0.6% the 10-city index.

Average home prices for September remain comparable to their levels in the winter of 2007.

The chairman of the S&P index committee, David M. Blitzer, said:

Home prices and the economy are both enjoying robust numbers. However, mortgage interest rates rose in November and are expected to rise further as home prices continue to outpace gains in wages and personal income. Affordability measures based on median incomes, home prices and mortgage rates show declines of 20-30% since home prices bottomed in 2012. With the current high consumer confidence numbers and low unemployment rate, affordability trends do not suggest an immediate reversal in home price trends. Nevertheless, home prices cannot rise faster than incomes and inflation indefinitely.

Compared with their peak in the summer of 2006, home prices on both 10-city and 20-city indexes remain down about 9.2% and 7.1%, respectively. Since the low of March 2012, home prices are up 40.4% and 43.1% on the 10-city and 20-city indexes, respectively.