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S&P Case-Shiller: Home Prices Gain in August

October 27, 2016 by support

Home prices gained in August per the 20-City S&P Case-Shiller Home Price Index. Analysts said that home values continue to expand in spite of challenges including low inventories of available homes and strict mortgage qualification requirements.

National Home Price Index Near 2006 Peak

According to the national Case-Shiller Home Price Index, August home prices are 0.10 percent below their 2006 peak and all metro areas in the 20-City Home Price Index posted gains. Top gains in the 20-City Home Price Index were posted by Portland, Oregon with a year-over-year gain of 11.70 percent, Seattle, Washington home prices gained 11.40 percent and Denver, Colorado home prices gained 8.80 percent year-over-year.

All metro areas included in the 20-City Index posted year-over-year gains in excess of one percent. New York City had the lowest year-over-year price gain with a year-over-year reading of 1.70 percent in August. Washington, D.C. home prices rose 2.30 percent year-over-year. Home prices in the Cleveland, Ohio metro area increased by 2.90 percent year-over-year.

New Housing Bubble Unlikely

With home price gains close to peak prices seen before the housing bubble burst, concerns may arise over the potential for a new housing bubble to occur in coming months. Analysts say this is unlikely as home buyers are not taking out extreme levels of mortgage debt seen at the onset of the Great Recession. David M. Blitzer, chairman of the S&P Index Committee, said “There is no reason to fear another massive collapse is around the corner. The run-up to the financial crisis was marked with both rising home prices and rapid growth in mortgage debt.”

Possible Fed Rate Hike Won’t Cause Mortgage Rates to Explode

The Federal Open Market Committee of the Federal Reserve is expected to raise the Fed’s target federal funds rate in December. This action will lead to interest rate increases for consumer credit and mortgages, but not at levels that would make mortgage loans suddenly unaffordable. While gradual increases in federal interest rates would cause mortgage rates to rise over time, market conditions and related factors could potentially cause home prices to slow or even dip in some areas. Regional influences including employment and demand for homes are examples of factors contributing to home price growth or decline in specific areas.

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Filed Under: Home Values Tagged With: Home Prices

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This licensee is performing acts for which a real estate license is required. C2 Financial Corporation is licensed by the California Bureau of Real Estate, Broker #01821025; NMLS #135622. Loan approval is not guaranteed and is subject to lender review of information.

Loan is only approved when lender has issued approval in writing. Specified rates may not be available for all borrowers. Rate subject to change with market conditions. C2 Financial Corporation is an Equal Opportunity Mortgage Broker/Lender.

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The services referred to herein are not available to persons located outside the state of California.
C2 Financial Corporation is approved to originate VA and FHA loans, and has the ability to broker such loans to VA and FHA approved lenders. C2 Financial Corporation is not acting on behalf of or at the direction of HUD/FHA or the VA.

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