Home prices increased in all top 20 U.S. cities, with the highest annual gains seen in Seattle, Las Vegas and San Francisco, according to the latest report released 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 an annual gain of 6.2% in January. This is down from the 6.3% increase in December.
“The home price surge continues,” says David Blitzer, S&P Dow Jones Indices managing director and chairman of the Index Committee. “Since the market bottom in December 2012, the S&P Corelogic Case-Shiller National Home Price Index has climbed at a 4.7% real, inflation adjusted, annual rate. That is twice the rate of economic growth as measured by the GDP.”
The 10-City Composite increased at an annual rate of 6% in January, unchanged from December’s increase. The 20-City Composite increased 6.4%, up from December’s increase of 6.3%.
The cities which reported the highest annual increases include Seattle, Las Vegas and San Francisco with increases of 12.9%, 11.1% and 10.2%, respectively. Twelve of the top 20 cities reported a higher price increase in the year ending January 2018 than the year ending December 2017.
“While price gains vary from city to city, there are few, if any, really weak spots,” Blitzer said. “Seattle, up 12.9% in the last year, continues to see the largest gains, followed by Las Vegas up 11.1% over the same period. Even Chicago and Washington, the cities with the smallest price gains, saw a 2.4% annual increase in home prices.”
Before seasonal adjustment, the National Index reported a monthly increase of 0.05% monthly in January, while the 10-City and 20-City Composites increased by 0.3%. After seasonal adjustment, the national index showed a monthly increase of 0.5% and the 10-City and 20-City Composites increased by 0.7% and 0.8%, respectively.
Sixteen of the top 20 cities increased in January before seasonal adjustment, and all 20 cities reported an increase after seasonal adjustment.
“Two factors supporting price increases are the low inventory of homes for sale and the low vacancy rate among owner-occupied housing,” Blitzer said. “The current months-supply, how many months at the current sales rate would be needed to absorb homes currently for sale, is 3.4; the average since 2000 is six months, and the high in July 2010 was 11.9.”
“Currently, the homeowner vacancy rate is 1.6% compared to an average of 2.1% since 2000; it peaked in 2010 at 2.7%,” he said. “Despite limited supplies, rising prices and higher mortgage rates, affordability is not a concern. Affordability measures published by the National Association of Realtors show that a family with a median income could comfortably afford a mortgage for a median priced home.”