This story was originally published in Builder.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 6.3 percent annual gain in December, up from 6.1 percent in the previous month.
The 10-City Composite annual increase came in at 6.0 percent, no change from the previous month. The 20-City Composite posted a 6.3 percent year-over-year gain, down from 6.4 percent in the previous month.
Seattle, Las Vegas, and San Francisco reported the highest year-over-year gains among the 20 cities. In December, Seattle led the way with a 12.7 percent year-over-year price increase, followed by Las Vegas with an 11.1 percent increase, and San Francisco with a 9.2 percent increase. Nine cities reported greater price increases in the year ending December 2017 versus the year ending November 2017.
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.2 percent in December. The 10-City and 20-City Composites both reported increases of 0.2 percent. After seasonal adjustment, the National Index recorded a 0.7 percent month-over-month increase in December. The 10-City and 20-City Composites both posted 0.6 percent month-over-month increases. Twelve of the 20 cities reported increases in December before seasonal adjustment, while all 20 cities reported increases after seasonal adjustment.
“The rise in home prices should be causing the same nervous wonder aimed at the stock market after its recent bout of volatility,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “Across the 20 cities covered by S&P Corelogic Case Shiller Home Price Indices, the average increase from the financial crisis low is 62 percent; over the same period, inflation was 12.4 percent. None of the cities covered in this release saw real, inflation-adjusted prices fall in 2017. The National Index, which reached its low point in 2012, is up 38 percent in six years after adjusting for inflation, a real annual gain of 5.3 percent. The National Index’s average annual real gain from 1976 to 2017 was 1.3 percent. Even considering the recovery from the financial crisis, we are experiencing a boom in home prices."
Blitzer continued, “Within the last few months, there are beginning to be some signs that gains in housing may be leveling off. Sales of existing homes fell in December and January after seasonal adjustment and are now as low as any month in 2017. Pending sales of existing homes are roughly flat over the last several months. New home sales appear to be following the same trend as existing home sales. While the price increases do not suggest any weakening of demand, mortgage rates rose from 4.0 percent to 4.4 percent since the start of the year. It is too early to tell if the housing recovery is slowing. If it is, some moderation in price gains could be seen later this year.”
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