Home prices in 20 U.S. cities rose faster than projected in March from a year earlier, adding to signs of healthy demand at the onset of the industry’s busy selling season, S&P/Case-Shiller reported Tuesday.
The 20-city property values index increased 5.4% from March 2015 (the forecast was 5.16%) after climbing 5.4% in the year through February. The national home-price gauge rose 5.2% from 12 months earlier. On a monthly basis, the seasonally adjusted 20-city measure advanced 0.9% from February, the same as the unadjusted gain and the most in four months.
The March home-price gains follow a round of more timely data that showed purchases of existing and new homes and contract signings on previously owned houses all strengthened more than expected in April after the economy’s sluggish start to the year. Potential buyers still might be challenged by limited inventories, especially among lower-priced homes, while finding support from steady job gains and cheap borrowing costs.
“The economy is supporting the price increases with improving labor markets, falling unemployment rates and extremely low mortgage rates,” David Blitzer, chairman of the S&P index committee, said in a statement. “Another factor behind rising home prices is the limited supply of homes on the market.”
All 20 cities in the index showed a year-over-year gain, led by a 12.3% advance in Portland, Ore., and 10.8% in Seattle. After seasonal adjustment, Minneapolis had the biggest month-over-month gain at 1.3%; Cleveland had a decline of 0.1%.
Source: Bloomberg News