Home Prices Tick Up; Recovery is Strongest in Phoenix
New data released Tuesday showed more signs of improvement in the nation’s housing market, as home prices rose and mortgage rates remained low.
Average home prices rose 0.9% in August from a month earlier, according to the S&P/Case-Shiller Home Price Indices, which looks at prices in 20 major U.S. cities. The price index is now back at the level it hit in the summer and fall of 2003, though it remains roughly 30% below the peak level it reached in 2006.
The recent recovery in housing prices has been strongest in Phoenix, where prices rose 1.8% from July to August, and have surged 18.8% in the last year. Seattle was the only city on the list of 20 that saw a price decline in August, and the drop there was only 0.1%.
August prices in the 20 cities were about 8.5% above the lows they hit early this year, according to a news release from S&P Dow Jones Indices.
“The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market,” David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in the news release.
“News on home prices confirms other good news about housing. Single-family housing starts are 43% ahead of last year’s pace, existing and new home sales are also up, the inventory of homes for sale continues to drop, and consumer mortgage default rates are reaching new lows.”
Meanwhile, rates on home purchase mortgages remained at historically low levels, according to data released Tuesday by the Federal Housing Finance Agency.
The agency, which oversees Fannie Mae and Freddie Mac, said that the contract rate on a composite of conventional fixed-rate and adjustable rate loans was 3.55% in September. That was down a single basis point from 3.56% in August.
A separate rate that is used as index for some adjustable-rate mortgage contracts was unchanged in September, while the average interest rate on conventional 30-year fixed-rate mortgages rose by two basis points, to 3.76%, according to the agency.