Home prices were up just about everywhere in the second quarter, according to the latest data from the S&P/Case-Shiller Home Price Indices, released today. All three indices were up on an annual basis for the first time since the summer of 2010, when prices were seeing a boost from the home buyer tax credit.
The national index was up 1.2% in the quarter compared to the previous year and up 6.9% from the first quarter.
On a monthly basis, both the 10- and 20-city composites were up in June, gaining 2.2% and 2.3%, respectively. Year-over-year, the 10-city was up 0.1% and the 20-city rose 0.5%. Of the MSAs tracked, 18 were up on a seasonally adjusted basis from the previous month, and on a non-seasonally adjusted basis, prices picked up by more than 1.0% in all 20 metro areas.
"Several things are driving home prices up," wrote Patrick Newport, U.S. economist at IHS Global Insight, in an analysis of the numbers today, pointing to low interest rates, a smaller share of distressed sales, low inventory in some places, bulk sales of distressed properties by investors, and job growth.
However, Newport pointed out, while indices such as the Federal Housing Finance Agency's purchase-only house price index show that home prices are rising faster than inflation, Case-Shiller’s indices currently are not. "In any event, the Case-Shiller indices have accelerated this year, so it may only be a matter of time before they start outpacing CPI. Moreover, any rise in home prices, by reducing the number of underwater homes, and thus reducing the incentive to walk away from a mortgage, is a plus for the economy."
Claire Easley is a senior editor at Builder.