Home Prices Surge in February Despite the Rise in Mortgage Rates
The values of home in the US, had surged by 6.3% in February compared to the values a year ago. A report from S&P CoreLogic Case-Shiller Home Price Index, revealed that it is a wider gain than January’s 6.1% annual jump.
The prices of home were 6.7% higher than their peak in July 2006, but it didn’t account for inflation. After maintaining a steady rate for the last month, mortgage rates began to rise again and are now at their highest level in four years.
According to CNBC, the prices are rising more sharply in the nation’s largest metropolitan markets. The largest 10 cities saw an annual increase of 6.5% compared with 6% in February. The largest 20 cities saw 6.8% gains, up from 6.4% in January.
Local leaders continue to be Seattle (+12.7%), Las Vegas (+ 11.6%) and San Francisco (+10.1%). Thirteen of the top 20 cities saw bigger annual price increases in February than in January.
The Managing Director and chairman of the Index Committee at S&P Dow Jones Indices, David Blitzer, said;
“Year-over-year prices measured by the National index have increased continuously for the past 70 months, since May 2012. Over that time, the price increases averaged 6 percent per year. With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue.”
The current prices are as a result of a three-month running average, going back to December.
It was further reported that mortgage interest rates surged in January, but the rise does not make any difference. Prices of home are being driven entirely by very high demand and very low supply.