The S&P CoreLogic Case-Shiller US National Home Price index recorded a 5.5% increase in the year to September from 5.1% previously and was fractionally above expectations. Significantly, the overall price index surpassed the previous peak in prices seen in July 2006.
The seasonally adjusted national price index rose 0.8% for the month.
The 20-city annual increase was unchanged at 5.1% for September, while the 10-city index recorded an annual increase of 4.3% from 4.2% previously. Both these indices remain below their 2006 peak levels.
The strongest annual increase was recorded in Seattle at 11.0% with Portland pushed into second place at 10.9%.
The weakest annual gain was again seen in New York at 1.8% with Washington at 2.7% from 2.3% previously.
According to David Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, ‘the new peak in the national index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance’.
Interest rates will, however, be watched closely in the short term as long-term yields have already moved sharply higher this month with 30-year rates trading close to 3.00%. Although still very low in historic terms, the sharp increase in rates and expectations of further Fed tightening will pose an important test for overall confidence in the market.
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