The Standard & Poor’s/Case-Shiller 20-city home price index increased from an 8.1 percent year-over-year gain in January. And annual prices rose in February in all 20 cities for the second month in a row.
Eleven of the 20 cities reported price gains in February compared with January. Those monthly numbers are not seasonally adjusted and reflect the slower winter buying period.
The index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The February figures are the latest available.
Steady hiring and near-record low mortgage rates are driving up demand, helping sustain the housing recovery that began last year. Buyer traffic was 25 percent higher in March than it was a year ago, according to the National Association of Realtors.
At the same time, prices are surging because buyers have fewer homes to bid on. The number of homes available for sale has fallen nearly 17 percent in the past year to 1.93 million, the Realtors’ group said last week. At the current sales pace, that supply would be exhausted in 4.7 months, below the 6 months that is typical in healthier markets.
Home prices nationwide are still about 30 percent below their peak reached at the height of the housing bubble in August 2006. They are only back to where they were in the fall of 2003.
Steady home price gains can help drive the housing recovery, which benefits the broader economy. Higher home prices encourage more people to buy before prices rise further. They can also entice more homeowners to sell by making them more confident they’ll get a good price. In addition, higher prices raise the equity people have in their homes, which makes selling more profitable.
“Strengthening in home prices is a plus for growth through various channels, including increased consumer spending because of wealth and confidence effects, increased incentive to buy before prices go up some more and increased incentive to lend because of less chance of mortgages turning delinquent,” Jim O’Sullivan, chief U.S. economist with High Frequency Economics, said in a research note commenting on the latest Case-Shiller numbers.
But many homeowners still owe more on their mortgages than their homes are worth. That can make it difficult to sell. Banks are making it easier to short sell property ~ if you need to sell contact me about short selling your property.
Higher home values can also help the economy. They increase homeowners’ wealth, which encourages more spending. Consumer spending drives 70 percent of economic growth.
Sales of previously occupied homes leveled off over the winter but may increase in the coming months. A measure of signed contracts to buy homes rose to a three-year high in March.
Homebuilders are also starting work on more new homes and apartments. We are definitely seeing new construction in the Destin-South Walton Beaches area.That creates more construction jobs. Builders started work on more than 1 million homes at an annual rate in March. That’s the first time the pace has topped that threshold in nearly five years.
If you’re thinking about buying a property here at the beach or selling your current property, contact Teresa Turner, Your Destin Realtor, at (850) 933-7899 or email me at Teresa@Teresa-Turner.com or visit my website at www.SandestinTo30aRealEstate.com
***Information provided by Case-Shiller***