Home prices are continuing to rise; now mere basis points below the all-time highs for prices, set in 2006.
According to the latest data released Tuesday by S&P Dow Jones Indices and CoreLogic, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, reported a 5.3% annual gain in August, up from 5% in July.
Per the report, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index is currently at 184.42, which is within 0.1% of its record high of 184.62, set in July 2006.
The increase in August represents the 52nd consecutive month of positive gains.
According to the Case-Shiller report, the 10-City Composite posted a 4.3% annual increase, up from 4.1% in July, while the 20-City Composite posted a 5.1% annual increase, up from 5.0% in July.
The report states that Portland, Seattle and Denver turned in the highest year-over-year gains among the 20 cities for the seventh consecutive month, with year-over-year increases of 11.7%, 11.4% and 8.8%, respectively.
“Supported by continued moderate economic growth, home prices extended recent gains,” said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
“All 20 cities saw prices higher than a year earlier with 10 enjoying larger annual gains than last month,” Blitzer continued. “The seasonally adjusted month-over-month data showed that home prices in 14 cities were higher in August than in July.”
Blitzer also noted that other housing data including sales of existing single-family homes, measures of housing affordability, and permits for new construction also point to a “reasonably healthy housing market.”
Additionally, the Case-Shiller report showed that before seasonal adjustment, the National Index posted a month-over-month gain of 0.5% in August.
The report also showed that both the 10-City Composite and the 20-City Composite posted a 0.4% increase in August.
After seasonal adjustment, the National Index recorded a 0.6% month-over-month increase, and both the 10-City Composite and the 20-City Composite reported 0.2% month-over-month increases.
After seasonal adjustment, 14 cities saw prices rise, two cities were unchanged, and four cities experienced negative monthly prices changes, the report showed.
Ralph McLaughlin, the chief economist at online real estate listing service Trulia, cautions that the increase to a near-record high isn’t quite as drastic as it may seem.
“The numbers suggest housing price trajectory is picking up again, as it was the second month where price growth was larger than the previous month,” McLaughlin notes.
“Earlier this year, price growth slid for five consecutive months and raised questions about where home prices were heading,” McLaughlin continues. “We’re now seeing a reversing of that trend. While the S&P/Case-Shiller National Home Price Index is an important metric to watch, it’s worth noting that the measure is more reflective of price movements in premium homes rather than middle or lower-tier homes.”
Reflecting on the latest Case-Shiller results, the chief economist for online real estate listing service, Zillow, said that the while the market seems relatively healthy right now, it can’t stay on the same track into perpetuity.
“Throughout 2016, the U.S. housing market has been pretty resilient in the face of a continued shortage of homes for sale, with home prices growing quickly, but fairly predictably,” Zillow economist Svenja Gudell, said.
“Demand is high and enthusiasm for homeownership remains strong, especially among all-important young, minority and would-be first-time buyers. Incomes have been rising strongly in the last couple of years, helping to keep home buying reasonably affordable in most places,” Gudell continued.
“Overall sales volumes are up from a year ago, and up big in the case of newly constructed homes. Still, the market can’t stay on this course forever, and continued inventory shortages are leading to intense competition, escalating prices and mounting buyer frustration, with the average home search over the past year taking more than four months,” Gudell concluded. “Sooner or later we’ll need to begin seeing a big comeback in inventory to help re-balance this market between sellers and buyers.”