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Home Prices in 20 U.S. Cities Rise by Most Since Mid-2014

Home Prices in 20 U.S. Cities Rise by Most Since Mid-2014

(Bloomberg) -- Home prices in 20 U.S. cities grew in February at the fastest pace since mid-2014, underscoring the persistent scarcity of inventory amid strong demand, according to S&P CoreLogic Case-Shiller data released Tuesday.

Highlights of Home Prices (February)

  • 20-city property values index increased 6.8% y/y (est. 6.4%) after rising 6.4%; fastest gain since June 2014
  • National home-price gauge rose 6.3% y/y
  • Seasonally adjusted 20-city index rose 0.8% m/m (est. 0.7%); index level of 209.29 is highest in records back to 2000

Key Takeaways

The data showed monthly gains in all 20 cities, including strong advances in expensive areas such as Seattle and Los Angeles, along with cheaper regions including Cleveland and Detroit. Sales are getting a boost from the strong labor market and borrowing costs that are still relatively low, though they’ve been edging up in recent weeks.

At the same time, a shortage of available and affordable listings, especially of previously-owned houses, is sending prices higher and limiting purchases. Growth in property values continues to outpace wages, another hurdle for younger or first-time buyers looking to enter the housing market. Meanwhile, the ongoing price gains are translating into rising home equity for owners.

Home Prices in 20 U.S. Cities Rise by Most Since Mid-2014

Official’s View

“With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue,” David Blitzer, chairman of the S&P index committee, said in a statement.

Other Details

  • All 20 cities in the index showed year-over-year gains, led by a 12.7 percent increase in Seattle and an 11.6 percent advance in Las Vegas; Washington was slowest at 2.4 percent
  • After seasonal adjustment, Cleveland had the biggest month-over-month rise at 1.6 percent, followed by Detroit and Seattle with a 1.4 percent increase
  • Separate report from the Federal Housing Finance Agency showed its home-price index climbed 0.6 percent in February from a month earlier after a revised 0.9 percent increase
  • FHFA price index advanced 7.2 percent from February 2017

--With assistance from Kristy Scheuble

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net.

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Randall Woods

©2018 Bloomberg L.P.