Home prices saw a 3.5% annual increase in April according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. The March index showed a 3.7% gain compared to March 2018.
- The Case Shiller Index rose 3.5% annually in April compared to 3.7% gain in March.
- The 10-city composite rose 2.3% annually compared to 2.2% in March.
- The 20-city composite rose 2.5% annually vs. 2.6% in March.
The report is a three-month running average of prices which looks at time periods two-months prior. The Case Shiller index is among other reports which confirm that home prices are rising once again due to increased demand and lower mortgage rates.
Lower rates typically drive prices higher, although the full effect of this year’s mortgage rate cuts may not have come into full effect yet. Home prices rose more than expected in May according to the National Association of Realtors, indicating higher demand for houses.
The biggest price gains were in Las Vegas, Phoenix, and Tampa with increases of 7.1%, 6%, and 5.6% respectively. 9 out of 20 cities reported annual price gains higher than those seen in March.
Home prices are rising, but mostly at a slower pace nationwide, and this slower pace may attract buyers, many of whom have been turned off by a highly competitive and arguably overpriced housing market. However, there is also the issue that some buyers will be reluctant to buy in at what they feel may be the top of the market to avoid the loss in value when prices eventually cool down.
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“Home price gains continued in a trend of broad-based moderation,” says Philip Murphy, Managing Director and Global Head of Index Governance at S&P Dow Jones Indices. “Year-over-year price gains remain positive in most cities, though at diminishing rates of change. Seattle is a notable exception, where the YOY change has decreased from 13.1% in April 2018 to 0.0% in April 2019.”
Gold prices have increased today and are currently trading at $1,423.98/oz. The precious metal is now at a six-year high in August futures. US President Trump stated on Monday that the US may impose sanctions on Iran as tensions continue to bubble in the Persian Gulf dispute, and this uncertainty may be impacting the price of gold as well as the international stock markets which were mostly weaker overnight.