Home prices continued to rise modestly in February, according to
a report released on Tuesday, a continued upward push in home
values which underscores concerns that buyers' incomes aren't
keeping pace.
The S&P/Case Shiller Home Price Index, covering the entire
nation, rose 4.2% in the 12 months ended in February, weaker than a
4.4% increase in January.
The housing market has been gaining strength in recent months,
but some economists fear that the improvement is fragile because
wages haven't kept pace with price increases.
"Home prices continue to rise and outpace both inflation and
wage gains, " said David Blitzer, managing director and chairman of
the Index Committee at S&P Dow Jones Indices.
Still, Mr. Blitzer cautioned that only two markets--Denver and
Dallas--have surpassed their prerecession housing boom peaks. "If a
complete recovery means new highs all around, we're not there yet,"
he said.
Both the 10-city and 20-city indexes saw larger year-over-year
increases in February than in January. The 10-city index gained
4.8% from a year earlier, up from 4.3% in January. The 20-city
index gained 5% year-over-year, compared with a 4.5% increase in
January.
Economists surveyed by The Wall Street Journal expected a 4.8%
increase in the 20-city index.
Denver and San Francisco--both markets with strong economies
driven by the technology sector--reported the highest
year-over-year gains, as prices increased by 10% and 9.8%,
respectively.
Not seasonally adjusted, the 10-city and 20-city indexes saw
significant month-over-month increases of 0.5%, their largest
increases since July 2014. The U.S. index rose 0.1% over the prior
month in February.
Seasonally adjusted, the 10-city and 20-city indexes rose 0.9%
and the national index rose 0.4%.
Brokers say that part of what is pushing up prices is a shortage
of inventory. According to Redfin, a real-estate brokerage, 70% of
homes on the market as of March 31 were stale, meaning they had
been listed for 30 days or more.
A report out last week from the National Association of Realtors
found that the median sale price for a previously owned home was up
7.8% from a year earlier to $212,100 in March. Lawrence Yun, the
realtor association's chief economist, said that was a worrying
trend because people's incomes are only going up 2%.
More new construction is a key to boosting housing supplies, but
building activity has remained subdued so far this year. U.S.
housing starts rose 2% from a month earlier to a seasonally
adjusted annual rate of 926,000 in March, the Commerce Department
said earlier this month. So far this year, the seasonally adjusted
annual rate for starts is averaging only 969,000 a month, compared
with just over 1 million for all of 2014--the first time since 2007
they topped the 1 million mark.
Write to Laura Kusisto at laura.kusisto@wsj.com
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