Seattle, Portland lead the way as U.S. home prices scale new heights
WASHINGTON - U.S. home prices scaled new heights in April, with Seattle and Portland, Ore., leading the way, according to a report released Tuesday.
The Standard & Poor's/Case-Shiller 20-city home price index increased 5.4 percent in April compared with a year earlier, just a tick down from the 5.5 percent annual gain in March.
Seven cities set record highs, and home prices rose in all 20 major housing markets, with double-digit annual increases of 12.3 percent in Portland and 10.7 percent in Seattle. Denver came in third, with a 9.5 percent increase.
Boston, Charlotte and San Francisco also set record highs.
Shrinking inventories of homes for sale have boosted prices, while a healthy job market and historically low mortgage rates have kept demand from potential buyers strong during the spring months associated with the highest volume of sales.
The number of listings has fallen 5.7 percent from a year ago, the National Association of Realtors said last week.
"While strong price growth in these markets should help increase inventory in the coming months, homes will be significantly less affordable for homebuyers than this time last year," said Ralph McLaughlin, chief economist at the online real estate service Trulia.
In addition to the other cities at record home values, Dallas and Denver, continue to be well above their historic peaks.
Overall home ownership rates have dropped near a 48-year low in the aftermath of the housing bust that began in 2007. But sales have improved as the broader economy has slowly healed.
Sales of existing homes improved 1.8 percent last month to a seasonally adjusted annual rate of 5.53 million, the best pace since February 2007, according to the Realtors.
Providing the foundation for much of that growth has been a solid 4.7 percent unemployment rate that points to a stable period for workers.
Rising prices have also been tempered by low mortgage rates that are holding monthly ownership costs in check.
Mortgage buyer Freddie Mac said the 30-year fixed-rate mortgage averaged 3.56 percent last week. That figure is down from 4.02 percent a year ago and the long-term average of 6 percent.