U.S. home prices continued to climb at a steady pace in October, supported by low inventories and rising sales, according to S&P CoreLogic Case-Shiller Indices.
Home prices rose at an annual rate of 6.2% in October, according to S&P CoreLogic Case-Shiller's nonseasonally adjusted national home price index. The rate matches the previous month's figures.
The 10-city composite posted a 6% year-over-year increase in October, up from 5.7% in September. The 20-city composite showed a 6.4% annual gain, up from 6.2% in the prior month.
David M. Blitzer, Managing Director & Chairman of the Index Committee at S&P Dow Jones Indices noted that home prices are rising at three times the rate of inflation. "Sales of existing homes dropped 6.1% from March through September; they have since rebounded 8.4% in November. Inventories measured by months-supply of homes for sale dropped from the tight level of 4.2 months last summer to only 3.4 months in November," he added.
Among the 20 cities, Seattle, Las Vegas, and San Diego posted the highest annual price increases with 12.7%, 10.2% and 8.1%, respectively.
Blitzer forecast that some areas could see potential home buyers turn to renting because home prices are rising faster than wages, salaries and inflation. "Data published by the Urban Institute suggests that in some West coast cities with rapidly rising home prices, renting is more attractive than buying," he added.
On a seasonally adjusted monthly basis, the national index, 10-City and 20-City composites all posted a 0.7% increase in October.
In a separate statistical release, the Federal Housing Finance Agency said Dec. 21 that U.S. house prices rose at a seasonally adjusted monthly rate of 0.5% in October. In annual terms, house prices were up 6.6% from the same prior-year period.
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