Housing Prices in U.S. Cities Rise by Most Since Early 2006

[Purveyor]

Source: Bloomberg

By Lorraine Woellert - Oct 29, 2013
Home prices in 20 U.S. cities rose in August from a year ago by the most since February 2006 as stronger demand boosted values.

The S&P/Case-Shiller index of property prices in 20 cities increased 12.8 percent from August 2012, more than forecast, after a 12.3 percent gain in the year ended in July, a report from the group showed today in New York. The median projection of 28 economists surveyed by Bloomberg called for a 12.5 percent advance.

“You’ve got some momentum,” said Brian Jones, senior U.S. economist at Societe Generale in New York, who forecast a 12.9 percent increase in home prices. “The more encouraging thing is not just that prices accelerated, every area reported higher selling prices. The breadth of the increase was across the entire country.”

Tight inventories have boosted prices as buyers compete for a limited number of properties for sale. While housing continues to be a source of strength for the economy, higher mortgage rates and limited improvement in the labor market and wages risk slowing the pace of progress.

Read more: http://www.bloomberg.com/news/2013-10-29/housing-prices-in-u-s-cities-rise-by-most-since-early-2006.html

[groundloop]

1. Higher cost to own a home is a good thing?

Sure, everyone wants to see the value of their existing home rise. I've always felt like that's a farce though, because if I sell my house I pretty much have to buy another one, and the price of that next house is probably increasing right along with the price of my current house. It seems like in a lot of cases it ends up pretty much a wash, unless you're looking to buy your first house, in which case you're getting screwed.

edit to add: I'm no economist, though I did sleep at a Holiday Inn at some point in the past.

[magical thyme]

4. house prices still haven't come close to pre-crash levels

which means that many people that had larger houses to fit their kids can't afford to downsize and retire. We can't fix the economy on the backs of older people who are choosing between mortgage, heat, medicine and food.

We need employment to continue to rise and especially for salaries to get back to living wages. Then those who are past ready to downsize will be able to sell and those who are starting out their lives will be able to buy.

[jtuck004]

2. Not necessarily a good thing...

Especially given that well over half the market is being purchase by cash buyers- i.e. investors. Not homeowners, but people who seek to continually profit from others trying to put a roof over their heads.

http://www.doctorhousingbubble.com/gen-renter-generation-of-renters-demographics-of-housing-age/

http://www.doctorhousingbubble.com/house-broken-americans-equity-in-housing-american-net-worth-real-estate/

[upaloopa]

3. If you own a home your asset value is growing.

If you are a buyer the price you pay is going up.
All things are relevant.