There is confidence in the economy and yet, price of U.S. homes have still increased.
CNCB reports that according to the S&P/Case-Shiller National Home Price Index, Home values in October this year were 5.2 percent higher than October of 2014. The reason for the increase is the lack of supply of home for sales, which results to a rather competitive and stiff bidding environment. The October figures are higher than the 4.9 percent recorded annual increase in September.
Another factor to consider is the mortgages that have become cheap. It has boosted home buyers as owning a home became more affordable, although not necessarily in a sense that it is cheap. However, it may change since Federal Reserve's move to raise the interest rates in December with the expectation of the same into 2017.
The increase in pricing is even higher at the top home housing markets with a recorded gain of 5.5 percent annually. For example, San Francisco, Denver and Portland, Oregon, had the highest year-over-year gains, showing at least 10.9 percent increase compared to what it was a year ago.
Meanwhile, according to USA Today, the bottom three areas with the least increase recorded Chicago, Washington, D.C. and Cleveland at increases of 1.3%, 1.7% and 2.2%, respectively.
In a statement, David M. Blitzer, chairman of the S&P Dow Jones Indices Index Committee says, "Generally good economic conditions continue to support gains in home prices. Among the positive factors are consumers' expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts."
Meanwhile, the National Association of Realtors reported the previous week that compared to the same period last year, the medial sale price for single family homes, townhouses, condominiums and co-ops rose 6.3% in November to $220,300.
In addition, sales of existing homes fell lowest in 19 months, with a drop recorded at 10.5 percent based on seasonally adjusted bases.
