U.S. home prices continued to rise steadily in October as a result of long-running low inventory and increasing demand.
Seattle was again the country’s hottest market, with the biggest spike in home prices and continuous strong demand, according to two reports released Tuesday.
In October, U.S. home prices grew 6.2% compared to the same period last year. Seattle led the way with a 12.7% year-over-year increase, more than double the national average, according to the S&P CoreLogic Case-Shiller Index.
Boosted by a tech boom and robust foreign investment, Seattle’s housing market has been the best performer since September 2016, according to the S&P CoreLogic Case-Shiller 20-city composite.
The price growth is showing no signs of slowing down, given the continuously strong demand in the West Coast seaport city. The Housing Demand Index for the Seattle metro area stood at 170 in November, a sharp increase from last year’s 104, according to a Redfin report.
Across the country, the Redfin Housing Demand Index increased 29.1% year-over-year to 127. A reading of 100 represents the historical average of the index, which is based on thousands of customers in 15 U.S. metro areas requesting home tours and making offers.
In November, the number of buyers requesting tours increased 41.3% compared to November 2016, while those writing offers increased 10.5%.
However, the Redfin Housing Demand Index saw a 6.7% decrease in November from October, in part due to limited housing stock.
While buyers still want to pursue homeownership before mortgage interest rates increase and prices rise even more, there just aren’t enough homes for sale, especially at the lower-to-mid-level price range, according to Nela Richardson, chief economist at Redfin.
“Three years of low inventory is taking its toll on buyer demand in terms of tour and offer activity,” Ms. Richardson said in the report.
Across the 15 metro areas Redfin tracks, there were 18% fewer homes for sale in November than in the same month last year. November also marked the 30th straight month of inventory declines on an annual basis and the fifth consecutive month of double-digit declines, according to Redfin.
This is echoed by David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. S&P Dow Jones Indices isn’t related to Dow Jones Media Group, publisher of Mansion Global.
“Home prices continue their climb supported by low inventories and increasing sales,” he said in the report.
In terms of annual price growth, Seattle was followed by Las Vegas (10.2%), San Diego (8.1%) and San Francisco (7.7%).
The reports didn’t break out numbers for the the luxury segment specifically.
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