With more homebuyers competing for a limited supply of homes, sellers are upping their prices to match the high demand, according to the S&P CoreLogic Case-Shiller Indices for August 2017.
The National Home Price Index reported a gain of 6.1 percent in August, rising 0.2 percent from the previous month. The 10-City Composite index measured 5.3 percent, up from 5.2 percent in July; the 20-City Composite measured at 5.9 percent, up from 5.8 percent in July. In total, 19 of the 20 cities taken from the 20-City Composite index showed increases in home values both before and after accounting for seasonal adjustments.
“The price gains are not simply a rebound from the financial crisis,” stated David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Nationally home prices have reached new all-time highs.”
Seattle, Las Vegas and San Diego reported the highest year-over-year gains of 13.2 percent, 8.6 percent and 7.8 percent, respectively. Only Atlanta showed a slight dip in home value of 0.2 percent. Miami experienced a year-over-year gain of 5.4 percent, with an August 2017 level of 139.92.
Compared to the rest of the economy, housing prices are showing record improvement within the past few months due to low interest rates, increased housing demand and limited existing home inventory. However, given that the Federal Reserve is starting to push short-term interest rates with mortgage rates expected to follow suit, home prices aren’t expected to remain high for long. Homeownership, for example, has seen a steady decline since home values have increased, as first-time buyers and those trying to enter the market are struggling to find affordable housing.