US home prices climbed again in July

WASHINGTON – U.S. home prices rose again in July, pulled up by strong gains in Portland, Seattle and Denver.

The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index, released Tuesday, rose 5 per cent in July from a year earlier after increasing 5.1 per cent in June.

The latest report is further evidence that prices are being pushed higher by the limited inventory of homes on the market. That is hurting sales of both new and existing homes, despite buyer enthusiasm and historically low mortgage rates.

“With inventory still very tight, the pressure on home prices is all to the upside,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.

The Commerce Department reported Monday that new home sales fell 7.6 per cent in August. And the National Association of Realtors said last week that sales of existing homes slipped 0.9 per cent in August. Inventory collapsed 10.1 per cent from a year ago to 2.04 million homes.

Prices rose 12.4 per cent in Portland, 11.2 per cent in Seattle and 9.4 per cent in Denver.

Price gains were more modest outside the Northwest. They rose just 1.7 per cent in New York, 3.7 per cent in Chicago and 5.5 per cent in Los Angeles.

The 20-city price index plunged after the housing bubble started to burst in 2006, plummeting by more than a third before hitting bottom in March 2012. Since then, prices are up 42.4 per cent. But they remain 7.6 per cent below the peak reached in July 2006.

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This story has been corrected to show that the 20-city index rose 5 per cent in July, not 5.1 per cent, and 5.1 per cent in June, not 5 per cent.