United States home prices hit new highs

US home prices grow just 5.5 percent in April, missing analysts' expectations

US single-family home prices rose in April due to tight inventory of houses on the market and low mortgage rates, a survey showed on Tuesday, and economists see no imminent change in the trend.

The national home price index increased 5.5 percent in April, versus 5.8 percent in March.

David Blitzer of S&P Dow Jones' index committee said in a release that rising prices across the country reflects that the supply of homes for sale "has barely kept pace with demand", while the inventory of new or existing homes for sale has shrunken to a four-month supply.

Our standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa and Alameda in the "San Francisco" index (i.e., greater MSA) and are imperfect in factoring out changes in property values due to improvements versus appreciation (although they try their best). After the seasonal adjustment, the National Index and the 10-City Composite each recorded a 0.2 percent month-over-month increase and the 20-City Composite posted a 0.3 percent month-over-month increase.

"The increase in real, or inflation-adjusted, home prices in the last three years shows that demand is rising", Blitzer saud.

Delving into details, out of 20 cities covered in the report, 15 recorded positive monthly home price growth.

With mortgage rates hovering at about 4 percent and high-paying tech jobs that make for a comfortable house-hunting budget, it's not hard to see why Seattle's housing market has become so competitive. That annual growth rate was a step back from a 4.4 percent increase in March. Those gains were the highest in almost three years.

"While this is welcome news for homebuyers, the number of homes listed for sale is not meeting consumer demand and markets are getting tighter", First American's chief economist, Mark Fleming, said. Moreover, mortgage default rates are low and household debt levels are manageable.

Of the 20 cities analyzed for the Index, Dallas, Texas, Portland, Ore., and Seattle, Wash., again topped the charts, with prices up 8.4 percent in Dallas, 9.3 percent in Portland and 12.9 percent in Seattle. Rather, will home price gains gently slow or will they crash and take the economy down with them?

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