U.S. home prices have risen at a quickening pace, according to the S&P CoreLogic Case-Shiller national home price index (not seasonally adjusted) for December released on Tuesday. The year-over-year increase of 3.8% was 0.3 percentage points above the November Increase. The national average rose by 3.8% for the year.
Home prices jumped by 6.5% year over year in Phoenix, the largest increase among the cities in the index’s 20-city composite group. Prices rose 5.3% in Charlotte and 5.2% in Tampa. No city posted a year-over-year price decline. Minneapolis and Chicago posted year-over-year gains of 1%, the lowest among the 20-city group.
On a non-seasonally-adjusted (NSA) basis, the national index rose by 0.5%, and the 10-city and 20-city indexes both rose by 0.4% month over month. The consensus economists’ estimate called for the 20-city average home price to rise by 2.8% year over year unadjusted and to rise by 0.5% month over month adjusted.
In all U.S. cities included in the December 20-city home price index, 11 posted NSA month-over-month price increases. Cities posting lower prices were Cleveland (down 0.7%), Minneapolis (0.6%) and Dallas (0.2%), while four cities posted declines of 0.1% (Atlanta, Chicago, Denver and Detroit). Prices remained unchanged in Charlotte and Los Angeles.
Craig Lazzara, managing director and global head of Index Investment Strategy at S&P Dow Jones Indices, said:
The U.S. housing market continued its trend of stable growth in December. December’s results bring the National Composite Index to a 3.8% increase for calendar 2019. This marks eight consecutive years of increasing housing prices (an increase which is echoed in our 10- and 20-City Composites). At the national level, home prices are 59% above the trough reached in February 2012, and 15% above their pre-financial crisis peak. Results for 2019 were broad-based, with gains in every city in our 20-City Composite. … As was the case last month, after a long period of decelerating price increases, the National, 10-City, and 20-City Composites all rose at a faster rate in December than they had done in November; 12 of our 20 cities likewise saw accelerating prices. It is, of course, too soon to say whether this marks an end to the deceleration or is merely a pause in the longer-term trend.
Bill Banfield, Quicken Loans Executive Vice President of Capital Markets, commented:
We continue to see home price increases driven by low supply and strong demand. While the future isn’t always clear, the recent drop in interest rates to historic lows could provide additional affordability for even more buyers to consider making a move.
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