Index Shows US House Prices Are Still Rising

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28th August 2013 16:37 - Housing

In the first month of the summer housing season home prices continued to rise, with a 0.9% increase in figures for June from the month before – according to the S&P/Case-Shiller Home Price Index. The rate of increase slowed minimally, with two cities (Atlanta and Chicago) posting price jumps of more than 3% (3.4% and 3.3%, respectively).

Furthermore, all twenty cities in the index showed some month-on-month gains, and the combined year-over-year index is up over a tenth (12.1%). The largest price rises came from Las Vegas, San Francisco and Los Angeles – up 24.9%, 24.5% and 19.9% respectively.

David Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, said:

"Overall the report shows that housing prices are rising but the pace may be slowing."

However, the index only tracks prices of single-family homes, thus it is considered less of a reliable market indicator in areas where many of the properties for sale are apartments.

In the past, the volume of homes sold tends to rise as interest rates convince buyers that it’s “now or never.” While current rates of 4.51% for thirty year fixed loans – as measured by Bankrate.com – are still quite low compared to previous decades, they do represent a rise from sub-4% rates which were available earlier on this year.

David Blitzer, continued to say:

 "With interest rates rising to almost 4.6%, home buyers may be discouraged and sharp increases may be dampened."

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