Sustained increases for home prices in 20 U.S. cities in April indicate the housing industry is juggling stable demand with a shortage of inventory, figures from S&P CoreLogic Case-Shiller showed Tuesday.
The 20-city property values index rose 5.7% year-to-year (the estimate was 5.9%). The national price gauge increased 5.5% year-to-year. The seasonally adjusted 20-city index climbed 0.3% month-to-month (the estimate was 0.5%).
Stubbornly low inventory in housing, particularly for more-affordable properties, has helped drive steady home-price gains. While rising property values are helping cushion homeowners' balance sheets, they also are inhibiting lower-end buyers — especially first-timers — from getting a piece of the action, as wage gains haven’t kept pace. At the same time, industry demand remains healthy, with solid job gains and low mortgage rates supporting purchases.
"Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up," David Blitzer, chairman of the S&P index committee, said in a statement. "The supply of homes for sale has barely kept pace with demand and the inventory of new or existing homes for sale shrunk down to only a four-month supply."
All 20 cities in the index showed year-over-year gains, led by a 12.9% advance in Seattle and a 9.3% rise in Portland, Ore. After seasonal adjustment, Detroit had the biggest month-over-month increase at 1.8%, while Seattle had a 1.1% gain. Home prices fell from the prior month in Cleveland, Boston, San Francisco, Washington and Tampa, Fla.
