By Katie Murar
Housing prices, fueled by lower interest rates and a strengthening economy, continued to rise in November, two reports released Tuesday show.
The November 2015 S&P/Case-Shiller Home Price Index for 20 cities, released by S&P Dow Jones Indices, show that home prices continued their rise across the country over the last 12 months. The index increased 5.8 percent from a year earlier, with a seasonally-adjusted increase of 0.9 percent from November.
This slightly topped estimates from economists surveyed by Bloomberg, who had projected a 5.7 percent gain for 2015, with an estimated 0.8 percent monthly increase.
The S&P/Case-Shiller index compiles data from a three-month average, which means the November figure includes transactions from October and September.
All 20 cities in the index showed a year-over-year gain: Portland, Oregon experienced the biggest increase with an 11.1 percent upturn, while Chicago had the smallest increase, with only a 2 percent rise.
“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” David Blitzer, chairman of the S&P index committee, said in a statement. “The consumer portion of the economy is doing well; like housing, automobile sales were quite strong last year.”
In a separate report released by the Federal Housing Finance Agency, U.S. house prices rose in November, up 0.5 percent on a seasonally adjusted basis from the previous month. According to the report, house prices were up 5.9 percent from November 2014 to November 2015. The index levels for October and November 2015 exceeded the prior peak level from March 2007.
The S&P/Case-Shiller Index measures the changes in prices of single-family homes in American cities and compares them against a base value of 100, representing home prices in January 2000. The FHFA House Price Index is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac.
Both indices, seasonally adjusted, increased substantially in the first quarter year over year.
“Regionally, both the Case-Shiller and FHFA data show widespread increases in prices over the past year, but the paces of appreciation have varied,” Daniel Silver, a J.P. Morgan economist, said in a statement issued Tuesday.
Silver noted the appreciation of prices may be due in part to “limited available inventory as well as a smaller share of distressed sales in the market than in recent years.”
The inventory of homes in December was down 18.4 percent from the year before, resulting in an increased demand for property, said Jon Broadbooks, director of communications for the Illinois Association of Realtors.
“We ended the year up in sales and median house prices because consumers are becoming increasingly confident, and inventories are tight throughout the region,” Broadbooks said.
Broadbooks said this trend will continue throughout 2016 as the economy strengthens, and demand for houses remain high.
“When you have fewer properties in the market demand increases,” Broadbooks said, “which is good for sellers and puts an added pressure on people trying to purchase houses.”