mostlycloudy
Friday February 12th, 2016 4:48AM

Home prices rise 12.4%, most in 7 1/2 years

By The Associated Press
WASHINGTON (AP) -- U.S. home prices rose 12.4 percent in July compared with a year ago, the most since February 2006. An increase in sales on a limited supply of available homes drove the gains.

The Standard &Poor's/Case-Shiller 20-city home price index reported Tuesday improved from June, when it rose 12.1 percent from a year ago. And all 20 cities posted gains in July from the previous month and compared with a year ago.

Still, the month-over-month price gains shrank in 15 cities in July compared with the previous month, indicating prices may be peaking. And the month-over-month gains in the 20-city price index have slowed for three straight months.

Stan Humphries, chief economist for real estate data provider Zillow, said home price should continue to rise but at a slower pace. Mortgage rates have increased more than a full percentage point since May. And more homes are being built. That should ease supply constraints that have inflated prices in some markets.

"This ongoing moderation is good for the market overall," Humphries said.

Home prices soared 27.5 percent in Las Vegas from a year earlier, the largest gain. San Francisco's 24.8 percent jump was the second largest and the biggest yearly return for that city since March 2001.

The index covers roughly half of U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The July figures are the latest available. They are not adjusted for seasonal variations, so the monthly gains reflect more buying activity over the summer.

Since bottoming out in March 2012, home prices have rebounded about 21 percent. They remain about 22 percent below the peak reached in July 2006.

The housing market has been recovering over the past year, helped by steady job growth, low mortgage rates and relatively low prices.

Sales of previously occupied homes rose in August to a seasonally adjusted 5.5 million annual pace, according to the National Association of Realtors. That's a healthy level and the highest in more than six years.

But the realtors' group cautioned that the August pace could represent a temporary peak. The gain reflected closings and largely occurred because many buyers rushed to lock in mortgage rates in June and July before they increased further. The Realtors said buyer traffic dropped off noticeably in August, likely reflecting the higher rates.

The average rate on a 30-year fixed mortgage was 4.5 percent last week. That's near a two-year high. It's still low by historical standards.

Rates rose in May after Chairman Ben Bernanke suggested the Federal Reserve could slow its bond purchase program before the end of the year.

But the Fed surprised markets last week by deciding against reducing the $85-billion-a-month in bond buys, which have kept longer-term interest rates low. The Fed said a key reason for its decision was the sharp increase in mortgage rates and other interest rates.

The Fed's decision could ease rates temporarily, although many economists expect the Fed will ultimately slow the purchases, perhaps as early as December. Rates would likely rise after that.

--
  • Associated Categories: U.S. News, Business News
© Copyright 2016 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 2 years ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 2 years ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 2 years ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 2 years ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 2 years ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 2 years ago )
Business News
New details about the possible effects of the Zika virus on the fetal brain are emerging
WASHINGTON (AP) — New details about the possible effects of the Zika virus on the fetal brain emerged Wednesday as U.S. health officials say mosquito eradication here and abroad is key to protect preg...
6:22PM ( 1 day ago )
President Barack Obama is asking Congress for more than $1.8 billion in emergency funding to help fight the Zika virus
WASHINGTON (AP) — President Barack Obama is asking Congress for more than $1.8 billion in emergency funding to fight the Zika virus and the mosquitoes that spread it here and abroad, but says "there s...
10:40PM ( 3 days ago )
Search for Missouri couple wanted for crimes across the South, including Ga., ends with one suspect dead and the other wounded
A weeklong search for a Missouri couple wanted in a series of robberies and abductions across the South ended with one suspect dead and the other wounded Friday, after authorities say they chased the pair across the highway and through a rural neighborhood and exchanged gunfire with them in Florida's Panhandle.
By The Associated Press
9:57PM ( 6 days ago )
Cheap oil will be sticking around for a while, buoying consumers, frustrating oil producers
Cheap oil will be sticking around for a while.That reality is wreaking havoc and causing uncertainty for some governments and businesses, while creating financial windfalls for others. Less expensive...
6:18PM ( 1 week ago )
Cruz (R) expected to claim conservative Iowa caucus victory, with Clinton (D) and Sanders (D) deadlocked among liberal vote
Texas Sen. Ted Cruz swept to victory in Iowa's Republican caucuses Monday, overcoming billionaire Donald Trump and Florida Sen. Marco Rubio. Among Democrats, Hillary Clinton and Bernie Sanders were deadlocked in a tight race.
By The Associated Press
10:55PM ( 1 week ago )