Jim O’Sullivan, chief USA economist at High Frequency Economics, characterized the price gains as “still fairly strong… the data continue to show a solid uptrend in home prices”.
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The S&P/Case-Shiller U.S. National Home Price Index registered a 5.4 percent year-over-year gain in December 2015, up slightly from the previous month’s 5.2 percent. That was just below the 5.8 percent estimate from a Reuters poll of economists.
“While home prices continue to rise, the pace is slowing a bit”, says David M. Blitzer, managing director at S&P Dow Jones Indices. Prices rose 0.6 percent from October to November and increased by 0.8 percent from November to December, based on seasonally adjusted figures that account for traditional fluctuations in the housing market. On a seasonally adjusted basis, the 10-city index rose 0.9% and the 20-city index rose 1% from November to December. Portland led the way with an 11.4 percent rise, followed by San Francisco with 10.3 percent and Denver with a 10.2 percent. The 20-city index gained 5.7% year-over-year, identical to last month’s increase.
“Continued increases in prices of existing homes, as shown in the S&P/Case-Shiiller Home Price Indices, should encourage further activity in new construction”.
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Average prices in the Seattle metro in December were less than 3 percent below the peak set in summer 2007, according to Case-Shiller data. Ten of 20 cities reported increases in December before the seasonal adjustment, while 19 cities increased for the month after the seasonal adjustment. Thirteen cities saw year-to-year prices climb at a faster rate than in November. The National Index, which covers all nine census divisions increased by 5.4 percent annually, compared to a 5.2 percent November gain. Unemployment has fallen to 4.9 per cent, lowest in almost eight years. “And global economic volatility is contributing to a strengthening US dollar, which will impact demand from foreign buyers, and help keep mortgage interest rates low”.
