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Home Prices Continue Rising at 5 Percent Annual Rate

The S&P/Case-Shiller Home Price Indices reported a 5.2.percent annual gain in March, covering all nine U.S. census divisions


S&P Dow Jones indices released the most recent results for the S&P/Case-Shiller Home Price Indices. Data released for March 2016 shows home process continued their rise across the country over the past 12 months.

Year over year, the S&P/Case-Shiller U.S. National Home price Index---covering all nine U.S. census divisions---reports a 5.2 percent annual gain in March, down from 5.3 percent the previous month. The 10-City Composite and the 20-City Composites' year-over-year gains remain unchanged at 4.7 percent and 5.4 percent, respectively, from the prior month. Ten cities reported greater price increases in the year ending March 2016 versus the year ending February 2016.

Before seasonal adjustment, the National Index posted a month-over-month gain of 0.7 percent in March. The 10-City Composite recorded a 0.8 percent increase, while the 20-City Composite posted a 0.9 percent increase in March. After seasonal adjustment, six cities saw prices rise, one city was unchanged and 13 cities experienced monthly price changes. The National Index recorded a 0.1 percent month-over-month increase after seasonal adjustment.

"Home prices are continuing to rise at a 5 percent annual rate, a pace that has held since the start of 2015," says David M. Blitzer, managing director and chairman of the index Committee at S&P Dow Jones Indices. "the economy is supporting the price increases with improving labor markets, falling unemployment rates and extremely low mortgage rates. Another factor behind rising home prices is the limited supply of homes on the market. The number of homes currently on the market is less than 2 percent of the number of households in the U.S., which is the lowest percentage seen since the mid-1980s.

"Price movements vary across the country," he continues. "The Pacific Northwest and the West continue to be the strongest regions. Seattle, Oregon and Denver had the largest year-over-year price increase. These cities also saw some of the largest declines in unemployment rates among the 2- cities included in the S&P/Case-Shiller Indices. The Northeast and upper Midwest were at the other end of the ranking. The cities with the smallest year-over-year price gains were Washington D.C., Chicago, New York City and Cleveland."

More than 27 years of history for these data series is available and can be accessed in full at homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices' housing blog, housingviews.com.

Source: Qualified Remodeler/QR June 2016 issue