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US House Prices Rise

Posted by Ron Neal on Tuesday, September 3rd, 2013 at 1:40pm.

U.S. home prices rose 12.1% in June from a year earlier, nearly matching a seven-year high. But month-over-month price gains slowed in most markets, a sign that higher mortgage rates may weigh on the housing recovery. The Standard &Poor’s/Case-Shiller 20-city home price index slowed only marginally from May’s year-over-year gain of 12.2%, the fastest since March 2006. And all 20 cities posted gains from the previous month and compared with a year ago, according to the report released Tuesday. Home prices in Las Vegas soared 24.9% from a year earlier to lead all cities. Purchases by investors have helped drive that increase. Other cities hit hard by the housing bust also posted stunning gains in the past year. Prices have jumped 24.5% in San Francisco and nearly 20% in both Los Angeles and Phoenix. Still, 14 of the 20 cities posted smaller gains in June compared with May. That’s unusual considering June is the middle of the summer buying season. Steady job gains and low mortgage rates have encouraged more Americans to buy homes. And even as demand has risen, a limited number of homes have been available for sale. The combination has led to sharp prices gains. But mortgage rates have climbed more than a full percentage point since May. The increase has already slowed sales of new homes in July. And economists expect it could drag re-sales lower in August. A slowdown from the strong price gains in recent months isn’t necessarily a bad thing, economists said. It may keep home prices from becoming unaffordable. Stan Humphries, chief economist at real estate data provider Zillow, says price gains will likely keep slowing in the coming months as investors make fewer purchases, mortgage rates rise further and more homes become available. “This ongoing stabilization…is happening, and it’s not the end of the world for the housing market,” he says. The index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The June figures are the latest available. They are not adjusted for seasonal variations, so the monthly gains reflect more buying activity over the summer. The housing rebound that began last year has helped drive economic growth, boost Americans’ wealth and create more construction jobs. But mortgage rates began to rise after Federal Reserve Chairman Ben Bernanke first signalled that the Fed might reduce its bond purchases later this year. The bond purchases have helped keep mortgage rates and other borrowing costs low.

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The Neal Estate Team

The Neal Estate Team is your #1 source for all of your Victoria BC real estate needs. Get in touch with us online or by phone at (250) 386-8181 to speak with a Victoria real estate buying or selling expert today. With decades of experience as a top selling Victoria REALTOR® and ranked in top 1% globally with over 4,000 transactions and $1 Billion SOLD, Ron Neal & The Neal Estate Team have the industry experience and market knowledge to help you make smart and informed buying or selling decisions. 

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