Nov. 28 (UPI) — A major gauge of home prices in the United States rose 6.2 percent in September, fueled by a strong economy and dwindling inventories, according to Standard and Poor’s data.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported the monthly rise on an annualized basis. In August, it rose 5.9 percent in the national survey.
In a 20-city composite, the index also rose 6.2 percent, compared with 5.8 percent the previous month, and the largest uptick since July 2014. All of these cities showed year-over-year gains and 13 cities reported higher prices in September than August.
Reporting the highest yearly gains were Seattle at 12.9 percent, Las Vegas at 9.0 percent and San Diego at 8.2 percent. The slowest gains were in Washington, D.C., at 3.1 percent and Chicago at 3.9 percent.
In month-over-month gains, Atlanta rose the most, at 1.3 percent, followed by San Francisco, at 1.1 percent.
“Most economic indicators suggest that home prices can see further gains,” David Blitzer, chairman of the S&P index committee, said in a statement.
He noted a strong economy of low interest rates, unemployment and inflation.
“One dark cloud for housing is affordability — rising prices mean that some people will be squeezed out of the market,” Blitzer said.
Home prices are rising at least twice as fast as average hourly wages, according to the Labor Department and about three times more than the Consumer Price Index.
“What’s happening today is a lot of scarcity in most places. Builders just aren’t putting up enough homes,” Patrick Newport, executive director for U.S. economics at IHS Markit, told Marketplace. “It’s not like 15 years ago, when it was easy credit driving up prices. Today it’s the fact that there are just not a lot of houses out there for sale.”
The total housing inventory was at 1.9 million in September, which is 6.4 percent lower than a year ago, according to the National Association of Realtors. The inventory has fallen year-over-year for 28 consecutive months.