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
Home prices in 20 U.S. cities rose in September by the most in more than three years, indicating resilient demand at a time of persistently scarce inventory, according to S&P CoreLogic Case-Shiller data released Tuesday.
- 20-city property values index increased 6.2% y/y (est. 6%), most since July 2014, after gaining 5.8% y/y
- National home-price gauge rose 6.2% y/y
- Seasonally adjusted 20-city index advanced 0.5% m/m (est 0.3%)
The residential real-estate market is benefiting from steady demand backed by a strong job market and low mortgage rates. The ongoing scarcity of available houses on the market, especially previously-owned dwellings, is likely to keep driving up prices. Eight cities have surpassed their peaks from before the financial crisis, according to the report.
“Home price appreciation is good for the industry and homeowners, but we need to address the sluggish first time homebuyer market,” said Collingwood Vice President Stephanie Schader. “I’m optimistic that, once resolution is achieved, congressional proposals on tax reform and regulatory relief may trigger a significant increase in the construction of affordable homes and subsequently improve the current household formation situation.”
In the past few years, growth in property values has been consistently outpacing wage gains, crimping affordability for younger, first-time buyers. That could eventually become a headwind to faster price appreciation. For now, though, rising property values are also helping to boost home equity and support consumer spending, the biggest part of the economy.
read more: Bloomberg
Home Values Heat Up to Record Highs
According to the October Zillow Real Estate Market Report—reporting the latest data—home values are gaining thousands of dollars in value each month.
In October, the national home value rose 6.5 percent to a median of $203,400—making the median home $12,500 more valuable than it was a year ago.
“Home values are growing at a historically fast pace, and those potential buyers want to get in the market while they still can,” said Zillow Chief Economist Dr. Svenja Gudell. “But with homes gaining so much value in just one year, buyers–especially first-time buyers–have to set aside more and more money for a down payment just to keep up with them.”
Across the U.S., the report notes that over half of the nation’s largest metropolitan statistical areas (MSAs) currently have home values higher than before the start of the Great Recession.
Regionally, the San Jose, California market reported the greatest increase in home values over 2017, with homes worth 12.3 percent—a $118,200 increase—compared to the same month last year.
read more: M Report
Battle for Control of Consumer Agency Heads to Court
The battle over who will lead the federal government’s top consumer financial watchdog agency is now headed to court.
The extraordinary fight, which intensified on Sunday night, adds to the uncertainty over the fate of the Consumer Financial Protection Bureau, a regulator created in the aftermath of the global financial crisis of nearly a decade ago. It encapsulates dueling visions of how the American financial system could be regulated, as President Trump moves to loosen regulation created under the Obama administration to rein in the financial industry.
Leandra English, the deputy director of the bureau who was set to become its temporary chief, filed a lawsuit late Sunday night to block Mr. Trump’s choice of someone else from taking control of the agency on Monday morning.
Mr. Trump has been seeking to install his budget director, Mick Mulvaney, as the agency’s acting director. The bureau had been a “total disaster” and needed new leadership to “bring it back to life,” Mr. Trump has said on Twitter. Mr. Mulvaney has been openly hostile to the consumer bureau, calling it a “sad, sick” joke and supporting legislation to eliminate it.
At stake is the immediate future of the consumer bureau — one of the last holdouts, within the federal government, against Mr. Trump’s efforts to strip away business regulations. While Mr. Trump can appoint his own director, confirmation could take months and slow down Republican efforts to defang the agency.
read more: NYT
US New Home Sales Surge Unexpectedly, Hitting 10-Year High in October
Sales of new U.S. single-family homes unexpectedly rose in October, hitting their highest level in 10 years amid robust demand across the country.
The Commerce Department said on Monday new home sales increased 6.2 percent to a seasonally adjusted annual rate of 685,000 units last month. That was the highest level since October 2007 and followed September’s slightly downwardly revised sales pace of 645,000 units.
New home sales have now increased for three straight months.
That together with last month’s increase in homebuilding and sales of previously owned homes suggests the housing market could be regaining momentum after treading water for much of the year. Housing has been constrained by shortages of homes for sale, skilled labor and suitable land for building.
Activity was also temporarily restrained by Hurricanes Harvey and Irma. Housing has been a drag on economic growth since the second quarter.
read more: CNBC
Entry-Level Buyers Drive Solid New Home Sales
Sales of newly built homes rose in October for the second consecutive month, driven by demand for entry level homes.
Purchases of newly built single-family homes, a small portion of all U.S. home sales, increased 6.2% to a seasonally adjusted annual rate of 685,000 in October from the previous month, the Commerce Department said Monday.
The advance supports a longer-term positive trend in the market. In all, new home sales were up 8.9% in the first 10 months of the year from the same period last year and have jumped 18.7% in the past 12 months.
Entry-level buyers are driving much of the activity. Sales of homes in the $200,000 to $300,000 range increased more than 35% in October from a year earlier. Demand for starter homes is expected to fuel continued sales growth if builders can ramp up construction quickly enough. Builders face a number of challenges, such as high land costs, labor shortages and rising material prices.
“The market is starving for affordable new homes, and builders cannot and will not ignore this hungry market,” said Svenja Gudell, chief economist at home listings website Zillow.
read more: WSJ
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