Home prices in 20 U.S. cities grew in February at the fastest pace since mid-2014, underscoring the persistent scarcity of inventory amid strong demand, according to S&P CoreLogic Case-Shiller.
The 20-city property values index increased 6.8% year-over-year after rising 6.4% the previous year, making this the fastest gain since June 2014. The national home-price gauge rose 6.3% year-over-year. The seasonally adjusted 20-city index rose 0.8% compared with January. The current index level of 209.29 is highest in records dating back to 2000
The data showed monthly gains in all 20 cities, including strong advances in expensive areas such as Seattle and Los Angeles, along with cheaper regions including Cleveland and Detroit. Sales are getting a boost from the strong labor market and borrowing costs that are still relatively low, though they've been edging up in recent weeks.
At the same time, a shortage of available and affordable listings, especially of previously-owned houses, is sending prices higher and limiting purchases. Growth in property values continues to outpace wages, another hurdle for younger or first-time buyers looking to enter the housing market. Meanwhile, the ongoing price gains are translating into rising home equity for owners.
"With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue," David Blitzer, chairman of the S&P index committee, said in a statement.
All 20 cities in the index showed year-over-year gains, led by a 12.7% increase in Seattle and an 11.6% advance in Las Vegas; Washington was the slowest gainer at 2.4%.
After seasonal adjustment, Cleveland had the biggest month-over-month rise at 1.6%, followed by Detroit and Seattle with a 1.4% increase. A separate report from the Federal Housing Finance Agency showed its home-price index climbed 0.6% in February from a month earlier after a revised 0.9% increase. The FHFA price index advanced 7.2% from February 2017.