Home prices rose in Au­gust, lifted by dwin­dling sup­ply

Daily Local News (West Chester, PA) - - MARKETPLACE - By Christopher S. Ru­gaber AP Eco­nomics Writer

WASHINGTON >> U.S. home prices climbed at a solid pace in Au­gust as more home buy­ers com­peted for fewer avail­able prop­er­ties.

The Stan­dard & Poor’s CoreLogic Case-Shiller 20city home price in­dex rose 5.1 per­cent in Au­gust, after a 5 per­cent gain in July. Port­land, Seat­tle and Den­ver re­ported the strong­est year-over-year in­creases for the sev­enth month in a row, with gains of 11.7 per­cent, 11.4 per­cent and 8.8 per­cent, re­spec­tively.

Steady hir­ing, low mort­gage rates and some early signs of rising pay have en­cour­aged more Amer­i­cans to buy homes. Sales of ex­ist­ing prop­er­ties in­creased 3.2 per­cent in Septem­ber from Au­gust, the Na­tional As­so­ci­a­tion of Real­tors said last week.

Yet the num­ber of homes for sale has fallen nearly 7 per­cent from a year ago, the NAR said. Just 2.04 mil­lion homes were for sale in Septem­ber.

“De­mand is high and en­thu­si­asm for home­own­er­ship re­mains strong, es­pe­cially among all-im­por­tant young, mi­nor­ity and would-be first-time buy­ers,” Svenja Gudell, chief econ­o­mist at real es­tate data provider Zil­low, said. “Still, the mar­ket can’t stay on this course for­ever, and con­tin­ued in­ven­tory short­ages are lead­ing to in­tense com­pe­ti­tion, es­ca­lat­ing prices and mount­ing buyer frus­tra­tion, with the av­er­age home search over the past year tak­ing more than four months.”

The Case-Shiller in­dex cov­ers roughly half of U.S. homes. The in­dex mea­sures prices com­pared with those in Jan­uary 2000 and cre­ates a three-month mov­ing av­er­age. The Au­gust fig­ures are the lat­est avail­able.

Devel­op­ers are build­ing more new homes, but not quickly enough to re­strain price in­creases. Builders broke ground on 783,000 sin­gle-fam­ily homes at a sea­son­ally ad­justed an­nual rate in Septem­ber, up 5.4 per­cent from a year ear­lier. Apart­ment con­struc­tion fell sharply.

Many in­sti­tu­tional in­vestors bought homes after prices fell sharply in the hous­ing bust and are con­tin­u­ing to rent them out, rather than sell them.

Home prices rose 8.1 per­cent in Dal­las from a year ago, 7.1 per­cent in Mi­ami, and 6.7 per­cent in San Fran­cisco. All 20 cities recorded price in­creased from a year ear­lier.

Home prices plunged 35 per­cent from their peak in July 2006 un­til they bot­tomed out in March 2012. They have since risen to just 7.2 per­cent be­low the peak.

THE AS­SO­CI­ATED PRESS

Real es­tate agent Lau­ren New­man, left, shows client Steve Martin a home for sale in Mount Pleas­ant, S.C.

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