The leading measure of U.S. housing prices, S&P/Case-Shiller Home Price Indices, was released on Tuesday by S&P Dow Jones Indices for December 2015. The report, tracking U.S. residential real estate prices, showed that home prices continued their rise both nationally and in 20 metropolitan regions over the last 12 months.
The results after seasonal adjustment show that both the National index and 20-City Composites Index reach a monthly increase of 0.8%, and the 10-City Composite index increase 0.7% month-over-month in December. The year-over-year gain also has a slight increase compared with data in November 2015. Most regions, like Texas, has reached an all-time high in 2015 on home sales. Among 20 metropolitan regions, Portland, San Francisco and Denver continue to be fastest growing cities with more than 10% annual increase. The results before seasonal adjustment are not that strong. the National Index only has a monthly increase at 0.1%, the 20-City Composite remained unchanged, and the 10-City Composite even decrease by 0.1%, which indicate a slowing pace of price growth. However, the housing price still runs faster than the annual rate of core inflation at 2.2%
David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, commented, “Sparked by the stock market’s turmoil since the beginning of the year, some are concerned that the current economic expansion is aging quite rapidly. The recovery is six years old, but recoveries do not typically die of old age. Housing construction, like much of the economy, got off to a slow start in 2009-2010 and is only now beginning to show some serious strength. Continued increases in prices of existing homes, as shown in the S&P/Case-Shiiller Home Price Indices, should encourage further activity in new construction. Total housing starts have stayed above an annual rate of one million starts per year since last March and single family home have been higher than 700,000 units at annual rates since June. Housing investment continues its positive contribution to GDP growth.”