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US home prices rise in October by most in 6 years; Idaho sees 12.4 percent increase

Home values are rising in more states and cities, according to a report from Core Logic. Idaho was one of the five states with the biggest increases, at 12.4 percent. The others were Arizona, where prices rose 21.3 percent, Hawaii, where they were up 13.2 percent, Nevada, at 12.4 percent, and North Dakota, at 10.4 percent. Photo by Pete Grady.

A measure of U.S. home prices rose 6.3 percent in October compared with a year ago, the largest yearly gain since July 2006. The jump adds to signs of a comeback in the once-battered housing market.

Core Logic also said Dec. 4 that prices declined 0.2 percent in October from September, the second drop after six straight monthly increases. The monthly figures are not seasonally adjusted. The real estate data provider says the decline reflects the end of the summer home-buying season.

Steady price increases are helping fuel a housing recovery. They encourage more homeowners to sell their homes. And they entice would-be buyers to purchase homes before prices rise further.

Home values are rising in more states and cities, according to the report. Prices increased in 45 states in October, up from 43 the previous month. The biggest increases were in Arizona, where prices rose 21.3 percent, Hawaii, where they were up 13.2 percent, and in Idaho and North Dakota, where prices rose 12.4 percent.

The five states where prices declined were: Illinois, Delaware, Rhode Island, New Jersey, and Alabama.

In 100 large metro areas, only 17 reported price declines. That’s an improvement September, when 21 reported declines.

Mortgage rates are near record lows, while rents in many cities are rising. That makes home buying more affordable, pushing up demand.

And more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.

At the same time, the number of available homes is at the lowest level in 10 years, according to the National Association of Realtors. The combination of low inventory and rising demand pushes up prices.

In the last week of November, an index measuring the number of Americans who signed contracts to buy homes in October jumped to the highest level in almost six years. That suggests sales of previously occupied homes will rise in the coming months.

Builders, meanwhile, are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in six and a half years last month. And builders broke ground on new homes and apartments at the fastest pace in more than four years in October.

 

 

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2 comments

  1. The overall growth is not due to a new boom that will continue like the days of 2006, it was a market correction as homes had been under valued. Circuit City, you remember them don’t you? Well Best Buy won, but I guarantee you the last six months Circuit City was still open, (having its ‘Going Out Of Business Sale’), they had by far more customers than the winner Best Buy.

    In comparison, 2008-2011 we had a flood of bank of foreclosures. What you can call a bank ‘Going Out Of Business Sale’ and the items on the shelves were your lost homes. What average seller could compete? Now that that chapter has neared a finish, the average Joe isn’t about to drop his price that low, so when availability declines then demand drives prices up. There is your correction. Happens in the stock market every day and year, just quicker usually. I hope to see continued moderate gains, 3.5 to 6% annually (depending on your area and market) would be a healthy normal market that is sustainable.

  2. Builders in Boise are definitely more optimistic about the future. Now builders are having to develop a strategy to find building lots.

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