Average prices rose in all 20 major markets tracked by the S&P/Case-Shiller U.S. National Home Price Index, reflecting a wellspring of confidence in the economy throughout the country.
To be sure, though, some markets stood out. Denver, Portland and San Francisco each posted 10.9% gains for the month.
The bottom three were Chicago, Washington, D.C. and Cleveland at increases of 1.3%, 1.7% and 2.2%, respectively.
“Generally good economic conditions continue to support gains in home prices,” said David M. Blitzer, chairman of the S&P Dow Jones Indices Index Committee, in a statement. “Among the positive factors are consumers’ expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts."
One factor propping up prices is a low number of homes for sale. Lower supply fuels quick sales and a competitive bidding environment.
The market has had an average of five months of inventory for the last year or so, reflecting "a level that suggests a fairly tight market with limited supplies," according to the S&P/Case-Shiller U.S. National Home Price Index.
Cheap mortgages have also boosted home buyers. The Federal Reserve's move to raise interest rates in December and the expectation that rates will continue to rise into 2017 could increase the price of borrowing, but Blitzer said "potential home buyers need not fear runaway mortgage interest rates" based on projected Fed increases.
Early indications point to continued momentum for home prices in November, too.
The National Association of Realtors reported last week that the median sale price for single-family homes, townhouses, condominiums and co-ops rose 6.3% in November to $220,300, compared to the same period a year earlier.
NAR reported that sales of existing homes fell to its lowest pace in 19 months, dropping 10.5% on a seasonally adjusted basis, but suggested the reason may be a federal rule change that's lengthening the process of closing on a sale.
By: Nathan Bomey (USA Today).
Review: Emerging Market Formulations & Research Unit, Flagship Records.
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