Two sets of US housing market data were released on Tuesday, and both showed that prices are still on the rise.
The S&P/Case Shiller report for August showed that prices in 20 major US metro areas rose 0.24% month-on-month, and 5.1% year-on-year, both more than expected.
Prices in all 20 cities increased month-on-month, led by Tampa, Phoenix and New York.
While rising home prices point to a healthy housing market on the demand side, they also expose an affordability problem that has locked some potential buyers out. According to S&P/Case Shiller, the index of national house prices is within 0.1% of the record it set 10 years ago.
Additionally, higher home prices are indicative of a shortage of homes for sale.
“The market can’t stay on this course forever, and continued inventory shortages are leading to intense competition, escalating prices and mounting buyer frustration, with the average home search over the past year taking more than four months,” Zillow Chief Economist Svenja Gudell in a note.
“Sooner or later we’ll need to begin seeing a big comeback in inventory to help re-balance this market between sellers and buyers.”
FHFA House Price Index
The FHFA house price index was also released Tuesday, and showed that home prices rose 0.7% in August (0.4% forecast according to Bloomberg.)
Prices in the Pacific region, which includes hotbeds like Portland and San Francisco, rose the most on a 12-month basis, up 7.9%.