U.S. Home Prices Climbed Sharply in October
U.S. Home Prices Climbed Sharply in October
Phelan M. Ebenhack/AP
Home prices went up sharply in October, as the market showed no signs of slowing after setting a record a month earlier.
The S&P CoreLogic Case-Shiller Indices, which covers the entire nation, rose 5.6% in the 12 months ended in October, up from the 5.4% increase reported in September.
The 10-city index gained 4.3%, up from 4.2% in September. The 20-city index gained 5.1% year over year, up slightly from a 5% increase in September.
The hottest markets in the country remain concentrated in the Northwest, as many buyers priced out of the Silicon Valley area flee to secondary tech hubs. Seattle reported a 10.7% increase, Portland reported a 10.3% year-over-year gain, and Denver had an 8.3% increase in home prices.
Case-Shiller offers a lagging indicator of the housing market. October’s numbers don’t reflect the sharp increase in mortgage rates that began following the U.S. presidential election in November.
Higher mortgage rates tend to put a damper on price growth because they drive up the monthly cost of a mortgage. That combined with the fact prices have risen faster than incomes could pose challenges to the market next year.
“Mortgage interest rates rose in November and are expected to rise further as home prices continue to outpace gains in wages and personal income,” said David Blitzer, managing director at S&P Dow Jones Indices. “Home prices cannot rise faster than incomes and inflation indefinitely.”
Month-over-month prices the U.S. Index rose 0.2% in October before seasonal adjustment. The 10-city remained unchanged, and the 20-city index increased 0.1% in October from September.
After seasonal adjustment, the national index rose 0.9% month over month. The 10-city index and the 20-city index each rose 0.6%.
After seasonal adjustment, all 20 cities saw prices rise in October.
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