Housing Market Remains Strong - 10/15/15
One of the strongest parts of the U.S. economy today is the housing market. According to Standard and Poor’s/Case Shiller data, home prices continued to rise through July. The S&P/Case Shiller twenty-city home price index rose five percent in July from a year earlier. Due largely to Northern California’s booming technology sector, home prices in San Francisco posted the largest gain.
Home prices in the Bay area have increased by more than ten percent over the past year. The same is true in Denver, as hordes of millennials continue to move to Colorado’s largest city. Sales totals nationally achieved an eight year high in July. Because not much new product has been built in recent years, the unsold inventory of homes has steadily tightened, resulting in rising prices. The current housing inventory is presently equal to five point two months of sales.
Inventory of around six months is more typical. As reported in the New York Times, price gains have been much smaller in many Eastern and Midwestern cities. Home prices are up by less than two percent year over year in the Washington metropolitan area. That’s also true in Chicago and in New York. The recent softness in reported job creation may cause some Americans to delay purchasing a home.