Dive Brief:
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Home prices in the U.S. rose 0.7% in August on a seasonally adjusted basis from July, according to the monthly House Price Index from the Federal Housing Finance Agency.
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The index is based on home sales prices from mortgages sold to or guaranteed by Fannie Mae and Freddie Mac.
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Prices were up 6.4% in August 2016 from August 2015, with the most significant increases in the Pacific division (up 7.9%).
Dive Insight:
The West Coast is experiencing significant home-price growth due to tight inventory and job-growth engines driving population increases there. Tuesday, the S&P Core Logic Case-Shiller U.S. National Home Price Index confirmed the continued upward trend in home prices nationwide with a 5.3% annualized increase in August. Portland, OR, Seattle and Denver posted the biggest year-over-year gains, rising 11.7% and 11.4%, respectively.
Last week, real estate listing website Zillow reported that home values rose at their fastest rate in two years in September, with seven of the country’s largest metro areas falling in the U.S. Census Bureau’s West region and besting Zillow’s national average appreciation rate of 5.5%.
Meanwhile, the West region saw 179,000 single-family homes started in September, according to the latest Commerce Department data, down 2.2% from August but 7.2% ahead of pace for the year compared to the same period a year ago. That’s ahead of the national average increase for single-family construction, which was reported up 5.4% year-over-year in September.
Builders are also confident that pent-up demand will mean more work down the line, according to the National Association of Home Builders/Wells Fargo Housing Market Index for October, which recorded its second-highest mark yet this year.