Home prices in the U.S. rose the most since 2006, according to a key property value index. The S&P / Case-Shiller index showed that property values rose 10.9 percent between March of last year and March of this year. That’s the largest gain in 12 months since April 2006. In February, the index rose 9.4 percent.
More Home Price Results
The index covers home prices in 20 metropolitan areas and adjusts prices seasonally. Cities in all 20 of the areas reported 12-month gains for the third consecutive month. Reuters’ Leah Schnurr reports that home prices in Phoenix led the way, jumping 22.5 percent in 12 months. Other cities toward the top of the list were San Francisco, which reported a 22.2 percent increase, and Las Vegas, which reported a 20.6 percent increase in home prices.
New York City’s home prices rose the least of the 20 areas that were checked, coming in at 2.6 percent.
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Florida Home Prices Hot
Steve Hagenbuckle, Managing Partner of TerraCap Partners, a private equity real estate firm based in Florida, said rising home prices is another indicator of an overall real estate recovery, which will soon include the commercial real estate market. TerraCap started purchasing land and foreclosed residential properties in 2009 and they are now selling them to large homebuilders including DR Horton, Taylor Morrison and Neal Communities. TerraCap is now raising capital for commercial real estate fund that has it has already deployed in several properties including office buildings, hotels and warehouses. Mr. Hagenbuckle pointed out that rents are rising in Florida as well as prices, his old home south Florida that he sold in 2002 just set an area record by renting for $35,000 a month.
TerraCap’s recently purchased over 500,000 sq feet of Flex-Industrial-Office space at one of the fastest growing airports in the country (7.8 Million passengers a year).
Factors Affecting Home Prices
Bloomberg’s Lorraine Woellert reports that property values are expected to continue rising thanks to less expensive borrowing costs and increases in consumer confidence levels. In May, consumer confidence increased to the highest level it has been at in over five years.
The Conference Board’s sentiment index beat the expectations of analysts polled by Bloomberg, rising to 76.2, which is the highest level it has been at since February 2008. Also the number of homes currently up for sale is still near the lowest it has been in 10 years, and foreclosures are beginning to ease.
Other Reports About Home Prices
Today’s home price report comes after a number of other positive indicators about the economy. The National Association of Realtors said that the purchases of previously owned homes rose to the highest level they have been at in over three years. Their median price jumped 11 percent, marking the fifth month in a row that property values rose more than 10 percent year over year.
In April new home sales rose annually to 454,000, which is a 2.3 percent from March and the second highest level in almost five years, according to the Department of Commerce. The median new home price rose 14.9 percent to $271,600.
Also on Friday it was revealed that jumbo mortgages are coming back thanks to improvements in the housing market.
Stocks rose after today’s positive economic reports. The S&P 500 Index jumped 1.3 percent.