Home prices jumped in December to their fastest full-year growth since 2013, as buyers shrugged off the effects of higher interest rates, The Wall Street Journal reports.
The S&P CoreLogic Case-Shiller Indices, covering the entire nation, rose 5.8% in the 12 months ended in December, compared with a 5.6% year-over-year increase reported in November.
The 10-city index gained 4.9% over the year, up from 4.4% the previous month, while the 20-city index gained 5.6% year-over-year, versus a 5.2% increase in November.
“The big takeaway from this report is that all signs that the housing market was going to cool in 2016 are now reversed,” says Ralph McLaughlin, chief economist at Trulia. “The spring selling season is going to be another doozy for homebuyers.”
Nationwide, home prices hit a record in September and have continued climbing by more than 5% year-over-year since then, driven by strong demand and a shortage of homes for sale.
Housing inventory in December hit its lowest level since 1999, and the number of homes for sale was down 7.1% in January compared with a year earlier.
“With all 20 cities seeing prices rise over the last year, questions about whether this is a normal housing market or if prices could be heading for a fall are natural,” says David Blitzer, managing director at S&P Dow Jones Indices.
While Blitzer says the rate of appreciation is much higher than the average pace of 1.3% since 1975, it remains within the range economists consider normal. “Home prices are rising, but the speed is not alarming,” he says.
The Wall Street Journal has the full story. A subscription may be required.
