US home prices rise 5.1% in Oc­to­ber

Kuwait Times - - BUSINESS -

US home prices rose again in Oc­to­ber as buy­ers bid­ding for scarce prop­er­ties drove prices higher. The Stan­dard & Poor’s CoreLogic Case-Shiller 20-city home price in­dex, re­leased Tues­day, rose 5.1 per­cent in Oc­to­ber from a year ear­lier af­ter climb­ing 5 per­cent in Septem­ber. Prices for the 20 ci­ties are still 7.1 per­cent be­low their July 2006 peak.

The broader Case-Shiller na­tional home price in­dex was up 5.6 per­cent in Oc­to­ber and has fully re­cov­ered from the fi­nan­cial cri­sis. Prices rose 10.7 per­cent an­nu­ally in Seat­tle, 10.3 per­cent in Port­land and 8.3 per­cent in Denver. New York reg­is­tered the small­est year-over-year gain: 1.7 per­cent. Home sales and prices have been helped by healthy de­mand, tight sup­plies and low mort­gage rates.

The Na­tional As­so­ci­a­tion of Real­tors said last week that fewer than 1.9 mil­lion homes were on the mar­ket in Novem­ber, down 9 per­cent from a year ear­lier. The tight sup­ply pushed the me­dian price of ex­ist­ing homes to $234,900 last month, up 6.8 per­cent from a year ago.

But the cheap loans may be van­ish­ing. The rate on the bench­mark 30-year, fixe­drate mort­gage last week reached 4.30 per­cent, the high­est since April 2014. Rates have surged since the Nov. 8 elec­tion of Don­ald Trump. In­vestors have bid rates higher be­cause they believe the pres­i­den­t­elect’s plans for tax cuts and higher in­fra­struc­ture spend­ing will drive up eco­nomic growth and in­fla­tion.

And the Fed­eral Re­serve, cit­ing im­prove­ment in the US econ­omy, this month raised short-term US in­ter­est rates for only the sec­ond time in a decade. —AP

This Wed­nes­day, Dec 7, 2016, photo, shows a house for sale in Mi­ami. The Stan­dard & Poor’s/Case-Shiller 20-city home price in­dex for Oc­to­ber was re­leased yesterday.—AP

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