Dive Brief:
-
Home prices have risen at a slow but steady pace over the past 12 months but remained flat in January, the Standard & Poor’s/Case-Shiller Home Price Indices reported on Tuesday.
-
Still, home prices are rising at double the speed of wage increases, which is keeping many potential homebuyers out of the market and increasing the likelihood that the slight interest rate hike expected later this year could further stymie their chances of buying their first homes, an analysis of the numbers from S&P Dow Jones Indices noted.
-
Of the 20 cities in the home price survey, Charlotte, Miami and San Diego reported the highest price increases—0.7%—and San Francisco saw the deepest dip—0.9%—in January.
Dive Insight:
Despite a conclusion that “the new home sector is weak,” the report’s authors predicted home prices will continue to rise. Strong job growth, cheap oil prices and low inflation have boosted consumer confidence, which can translate into sales and continued price gains.
In fact, they already have. A separate report by the National Association of Realtors this week showed pending home sales at their highest level since June 2013, topping expectations for the second straight month. Pending home sales—homes under contract and waiting for closing—are an indicator of what’s to come, so February’s 3.1% bump is a hopeful sign for the spring selling season.
