Stronger demand meant home prices in the country’s 20 largest cities hit their highest levels since February 2006, according to the latest S&P/Case-Shiller index of property prices.
The August index rose 12.8 percent year-over-year, beating analysts’ expectations of a 12.5 percent increase.
“The more encouraging thing is not just that prices accelerated,” Brian Jones, a senior economist at Societe Generale, told Bloomberg News, but that “every area reported higher selling prices. The breadth of the increase was across the entire country.”
The price increases were also triggered by a combination of low inventory – which in New York City, at least, has triggered bidding wars – and low mortgage rates, according to Bloomberg News. Mortgage rates are slowly creeping up, however, and combined with a sluggish job market may slow down the price increases in coming months, according to Bloomberg News. [Bloomberg News] – Hiten Samtani