Home prices appreciating locally and nationally
December 5, 2019
The pace of home price appreciation picked up in September, led by Seattle, according to the Case-Shiller U.S. National Home Price Index. Analysts credit strong demand and tight inventory as factors, and cite lower mortgage rates and "a solid labor market" for boosting demand.
Three metro areas - San Francisco, Chicago, and Boston - experienced home price drops in September (the most recent reporting period) compared to the previous month.
The U.S. National Home Price Index rose at a seasonally adjusted annual growth rate of 4.7% in September, up slightly from the August figure of 4.3%. A comparison of year-over-year changes shows the national index increased 3.2% in September from the same month a year ago.
The S&P report covering 20 metro areas shows local home prices varied from a drop of 2.1% to a gain of 9.6%. Ten areas surpassed the national average of 4.7%, with Seattle's 9.6% gain topping the list. San Francisco had the steepest drop at -2.1%.
The Home Price Index tallied by the Federal Housing Finance Agency also showed gains, but at different rates. Its Index showed a seasonally adjusted increase of 7.7% in September, up from 2.5% the previous month. FHFA's year-over-year figures revealed a 5.1% gain in September, improving on the increase of 4.8% in August.
Third quarter house prices edged up 1.1% from the previous quarter, and jumped 4.9% from third quarter 2018.
Other findings in FHFA's House Price Index included:
- House prices have risen for 33 consecutive quarters across the U.S.
- House prices rose in all 50 states and the District of Columbia between the third quarters of 2018 and 2019.
- House prices rose in all 100 of the largest metro areas in the U.S. over the last four quarters.
A closer look at local metro areas shows The Tacoma-Lakewood area ranked 16th among the 100 metro areas with a 6.7% spike in prices for the third quarter of 2019 compared to third quarter 2018. The Seattle-Bellevue-Kent area ranked 92nd with a 1.9% increase in prices from third quarter 2018 to third quarter 2019. Washington, with a 5.6% increase, ranked 18th in the U.S.
Homeowners who want to calculate their home's price appreciation can use FHFA's calculator. That tool projects what a given house purchased at a point in time would be worth today if it appreciated at the average appreciation rate of all homes in the area. It does not project the actual value of any particular house.
The FHFA-HPI is a weighted, repeat-sales index that measures average price changes in repeat sales or refinancing on the same properties. The agency said it also provides housing economists with "an improved analytical tool that is useful for estimating changes in the rates of mortgage defaults, prepayments and housing affordability in specific geographic areas."