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Home prices keep rising at rapid rate

February 2, 2018

For some time now, home prices have been on the rise as demand only continues to grow - especially among young first-time buyers - and supply continues to hover at low levels. That trend certainly continued toward the end of 2017, as even when homebuying activity was at some of its lowest points of the year, prices surged.

"Home prices ticked up at a historically strong rate."

In November - the latest month for which data is available - home prices ticked up at a historically strong rate once again, and the level at which prices grew outpaced October's high rate, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. Specifically, November's rate of 6.2 percent year-over-year growth for the median home price was up from 6.1 percent observed in October.

Indeed, prices climbed 0.2 percent between October and November, the report said.

"Home prices continue to rise three times faster than the rate of inflation," said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. "The S&P CoreLogic Case-Shiller National Index year-over-year increases have been 5 percent or more for 16 months."

A long-term trend
Meanwhile, home prices have been on the rise for 67 months - more than five and a half years - and reached an all-time high in November, according to the latest Home Price Index from Black Knight, Inc. The national median home price now stands $283,000, and had grown nearly 6.5 percent since the start of 2017.

In November, New York was one of the most notable regions for home price gains, as its median grew 1.44 percent from October to November, and the state had 4 of the 10 fastest-rising prices by metro region in the country, all of which were upstate. Florida, too, saw significant growth in this regard.

Unlikely to change
In addition, it's worth noting that these trends might only pick up more as time goes on, because with spring approaching, demand among would-be buyers will likely start to grow once again, according to the Walla Walla Union Bulletin. In addition, relatively few current homeowners are putting their properties up for sale, in large part because they have concerns about rising prices and mortgage rates hurting their ability to buy affordably themselves. While existing home sales are likely to rise over the course of 2018, it's unlikely the actual level of sales will approach historical averages.

"It's a chicken and egg scenario," Matthew Gardner, chief economist for Windermere Real Estate, told attendees at a recent industry breakfast event in Walla Walla. "If you can't find something you want to buy, do you list?"

With concerns about the rising cost of buying a home, the sooner would-be buyers can get into the market, the more likely they will be to lock in a deal that combines a still-low mortgage rate with an affordable home price. Waiting even a few months could end up costing buyers significantly over the life of a mortgage.




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