Case-Shiller Home Prices Continue to Rise
Standard & Poor’s reported that U.S. home prices saw year-over-year gains of 8.1 percent in January, the largest increase since June 2006, more evidence that super-low mortgage rates engineered by the Federal Reserve, low inventory due (in part) to recent changes in foreclosure laws, and strong demand from Wall Street investors have combined to revive the housing market.
The 20-city home price index rose just 0.1 percent in January after a gain of 0.2 percent in December, but, on a seasonally adjusted basis, the index rose 1.0 percent following a gain of 1.0 percent, the largest back-to-back gain since December 2005.
Interestingly, for all the hoopla surrounding this report, home prices have yet to reach recovery highs and have only returned to the pre-housing bubble burst level of 2003 as shown below.
That second chart is not nearly as impressive as many of the headlines I’ve read in the last hour…