Portland moves closer to peers in rising home prices

Marco Green
September 26, 2017

The national index saw prices climb 0.7 percent in July and 5.9 percent compared with a year earlier. The 20-City Composite posted a 5.8% year-over-year gain, up from 5.6% the previous month.

Residential prices across the country increased in the month of July even though there were fewer sales over the summer, which would normally dampen price gains. In July, Seattle led the way with a 13.5% year-over-year price increase, followed by Portland with a 7.6% increase, and Las Vegas with a 7.4% increase. After seasonal adjustment, the National Index recorded a 0.5% month-over-month increase. The NSA monthly gain of 0.7% came in at the consensus estimate. But construction of new single-family homes has been held back by a limited supply of land in hot markets and difficulty in finding construction workers.

Average home prices for July remain comparable to their levels in the winter of 2007.

"Home prices over the past year rose at a 5.9% annual rate", says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. When the number of homes to buy is low, the number of closed home sales will also be low, and when supply is low, but demand is high, prices inevitably go up. Automobiles are the second largest consumer purchase most people make after houses. The housing market will face two contradicting challenges during the rest of 2017 and into 2018. Meanwhile, recent policies at the Federal Reserve could push mortgage rates higher. "While the gains in home prices in recent months have been in the Pacific Northwest, the leadership continues to shift among regions and cities across the country". "The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year".

Other reports by Click Lancashire

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