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Case-Shiller home prices rise in-line with expectations
(REUTERS/Mike Blake)Single family homes for sale are seen in San Marcos
Home prices in January rose in-line with expectations according to the latest S&P/Case-Shiller home price index.
Over the prior month, home prices rose 0.87% and rose 4.56% over the prior year.
Expectations were for the report to show home prices rose 0.6% in January compared to the prior month and 4.6% over the prior year.
December's month-on-month increase was revised slightly higher, to 0.91% from a previously reported 0.87%, while the year over year increase in December was revised slightly lower to an increase of 4.44% from 4.46%.
The biggest increases came from Denver and Miami, which saw 8.4% and 8.3% year-on-year increases in January, respectively.
"The combination of low interest rates and strong consumer confidence based on solid job growth, cheap oil and low inflation continue to support further increases in home prices" says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices.
Blitzer added that:
Despite price gains, the housing market faces some difficulties. Home prices are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback. Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak. Any time before 2008 that housing starts were as low as the current rate of one million, the economy was in a recession.
Here's the latest chart from S&P, which shows that home price increases continue, but at a slower pace.
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