Home prices exceed pre-recession height -

U.S. home prices have fully recovered from their steep plunge while in the housing bust and Great Recession, according to a private measure.

Home prices exceed pre-recession height

The Standard & Poor’s CoreLogic Case-Shiller national home price index is slightly higher than the peak it set in July 2006, after rising 5.5 % in September from a year earlier. The milestone comes after in excess of four years of steady gains.

Still, prices didn’t fully recovered in several cities and other gauges indicate that home prices remain below their peaks.

Steady job gains and low mortgage rates have encouraged more Americans to buy homes. However the supply of available properties has dwindled, setting off bidding wars and pushing up prices at a rapid pace.

Seattle, Portland and Denver reported the most significant annual gains in September for the eighth straight month.

“The new peak set by the S&P Case-Shiller CoreLogic national index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance,” David Blitzer, managing director at S&P Dow Jones Indices, said.

The continued recovery in home prices shores up Americans’ household wealth and may provide more homeowners the motivation to sell. The number of homes for sale is low partly because many families haven’t much equity in their homes and would benefit little from a sale. Rising home values help counter that trend.

Yet many cities remain far below their pre-recession peaks, Blitzer said, including those that have seen large gains ever since the downturn, including Miami, Tampa, Phoenix, and Las Vegas.

And other analysts caution that imbalances continue in the housing market.

“Inadequate supply of homes available to buy – especially at the entry-level end of the market – remains a huge problem,” Svenja Gudell, chief economist for real estate data provider Zillow, said.

Since the real estate market began recovering in 2012, prices have far outpaced Americans’ incomes. That has made it difficult for many would-be buyers, particularly younger Americans, to benefit from low mortgage rates.

Home prices have gone up at a 5.9 % annual rate, adjusted for inflation, S&P says. Yet Americans’ after-tax incomes have increased just 1.3 % during that time.

Rates on mortgages have risen about a half-percentage point ever since the presidential election, to just about 4 %. That is still suprisingly low by historical standards, but could slow home sales in the coming months.

According to the S&P Case Shiller national home price index, home prices plummeted 27.4 percent from a peak reached in July 2006 through February 2012. They’ve already since recovered that loss and are also now 0.1 % above the previous peak.

S&P Case-Shiller issues several home price measures, including a composite index of 20 large cities. That measure remains 7 percent below its housing bubble peak.

Most other measures of the real estate market point to a solid recovery. Sales of existing homes rose to the fastest pace in nearly a decade in October. And developers broke ground on the most new homes in nine years recently. Sales of new homes slowed in October from the previous month, however are up a solid 12.7 % in the first 10 months of this year when compared to the same period in 2015.

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9123 Otter Pass, Tampa, FL

9123 Otter Pass
Tampa, FL

$179,000
- Lot Size
  
  4,792 sqft
- Home Size
  
  1,040 sqft
- Beds
  
  2 Beds
- Baths
  
  2 Baths
- Year Built
  
  1984
- Days on Market
  
  1
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