Las Vegas Home Prices Surge 15%

The S&P/Case-Shiller home price index for June increased by 8.1% for both the 20-city and the 10-city composite indexes. The national index rose 6.2% year-over-year, and all three indexes continue to demonstrate smaller price increases. Month over month, the national index rose 0.9% and the 10-city and 20-city indexes rose 1.6%, the largest increase since June of last year. The consensus estimate for month-over-month seasonally adjusted growth was 0.1%.

The index tracks prices on a three-month rolling average. June represents the three-month average of April, May and June prices.

Average home prices for June are back at their levels in the spring of 2005.

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Compared with their peak in the summer of 2006, home prices on both indexes remain down about 17%. Since the low of March 2012, home prices are up 27.8% and 28.5% on the 10-city and 20-city indexes, respectively.

All 20 cities in the index experienced a slowdown in year-over-year rates. Some, like San Francisco, saw significant drops in the rate of price increases while others, like Cleveland, posted just marginal gains.

Compared with year-ago increases of 30% in some cities, we’ve noted already that only Las Vegas posted a price hike of more than 15%. Home prices rose by 10.5% in Los Angeles, 11.5% in Miami, 12.9% in San Francisco and 10.2% in San Diego.

The chairman of the S&P index committee said:

Home price gains continue to ease as they have since last fall. For the first time since February 2008, all cities showed lower annual rates than the previous month. Other housing indicators — starts, existing home sales and builders’ sentiment — are positive. Taken together, these point to a more normal housing sector. … Bargain basement mortgage rates won’t continue forever; recent improvements in the labor markets and comments from Fed chair Janet Yellen and others hint that interest rates could rise as soon as the first quarter of 2015. Rising mortgage rates won’t send housing into a tailspin, but will further dampen price gains.

In another monthly review of house prices published Tuesday, the Federal Housing Finance Agency (FHFA) said that house prices rose 0.8% in the second quarter of 2014. The FHFA index measures purchase-only, seasonally adjusted house prices, and this is the 12th consecutive gain in the agency’s index. House prices are up 5.2% year-over-year in the second quarter, and the monthly index for June was up 0.4%.

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