The latest monthly report from the Case-Shiller Home Price Index shows U.S. home prices rose 12.1 percent in April compared to last year, and 2.5 percent compared to March. That’s the highest monthly increase in the history of the index.
All 20 cities tracked by the index showed positive year-over-year returns for at least the fourth consecutive month. The Hub’s 8.1 percent increase over last April was the sixth-lowest price rise among the cities, with Atlanta, Las Vegas, Phoenix and San Francisco all seeing prices spike more than 20 percent year over-year. Atlanta, Dallas, Detroit and Minneapolis posted their highest annual gains since the start of their respective indices. On a monthly basis, all cities with the exception of Detroit posted positive change.
"The 10- and 20-City Composites posted their highest monthly gains in the history of S&P/CaseShiller Home Price Indices," David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. "The recovery is definitely broad based. The two composites showed the largest year-over-year gains in seven years. Recent economic data on home sales and inventories confirm the housing recovery’s strength."
The recent rise in mortgage rates has caused some commentators to question whether the housing market’s recovery could slow down. Blitzer was sanguine about the prospect, saying in a statement, "home buyers have survived rising mortgage rates in the past, often by shifting from fixed rate to adjustable rate loans. In the housing boom, bust and recovery, banks’ credit quality standards were more important than the level of mortgage rates. The most recent Fed Senior Loan Officer Opinion Survey shows that some banks are easing credit restrictions. Given this, the recovery should continue."
Other commentators were more concerned.
"Today’s Case-Shiller numbers may reflect where the housing market has been in some of the frothier metros, but they are not indicative of where it’s headed … inventory levels are beginning to show signs of easing, and mortgage interest rates are creeping up," Zillow Chief Economist Stan Humphries said in a statement. "Home value appreciation in some of these areas will have to slow down, or potentially fall, as higher bottom-line prices are no longer masked by rock-bottom mortgage rates … Buyers expecting home values to continue rising at this pace indefinitely may be in for a shock."
