WASHINGTON – 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 Tuesday 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 homebuying 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.
The median price of homes in the Buffalo Niagara region in September, the latest statistics available from the Buffalo Niagara Association of Realtors, rose 4.9 percent to $125,000, while the average price rose 5.8 percent, to $145,656. For the year to date, the median rose 2.9 percent to $120,000, while the average was up 3.9 percent to $143,174. Sellers received 95.5 percent of their asking price. All figures are the highest for the month in at least two years.
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, and in Hawaii, where they were up 13.2 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 homebuying 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.
Last week, 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.