U.S. Home Prices Increase, Most Since 2006
Homes prices in the 20 U.S. cities tracked by the S&P/Case Shiller Home Price Indices increased by 13.3 percent in September, the largest growth since February 2006, after increasing by 12.8 percent the previous month
Twelve of the tracked cities posted double-digit annual gains, with Las Vegas leading again with a 29.1 percent annual increase. It was followed by San Francisco at 25.7 percent, Los Angeles at 21.8 percent and San Diego at 20.9 percent.
The index posted a 0.7 percent monthly gain. Detroit had the highest increase with 1.5 percent, but still remains the only city below its level in January 2000.
"Housing continues to emerge from the financial crisis: the proportion of homes in foreclosure is declining and consumers' balance sheets are strengthening," David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in the report. "The longer run question is whether household formation continues to recover and if home ownership will return to the peak levels seen in 2004."
The strong increases in the West are creating concerns of the possibility of another bubble, but data suggests slower growth in the market, analysts say.
"Existing home sales weakened in the most recent report, home construction remains far below the boom levels of six or seven years ago and interest rates are expected to be higher a year from now," Mr. Blitzer said.
Last week, the National Association of Realtors -- which reports home prices one month earlier -- reported a 12.8 percent yearly median home price increase