Home prices continue to rise nationwide.
According to the Standard & Poor’s Case-Shiller Index, home prices rose 6.9% between the first and second quarter of 2012, the largest quarter-to-quarter gain since the home-value tracker’s 1987 inception and another signal that the housing market is in recovery.
The private-sector metric’s results are similar to what the government’s Home Price Index showed for June, too — values rising quickly. In addition, for the second straight month, each of the Case-Shiller Index’s 20 tracked markets showed month-to-month improvement.
June would have marked three straight months if not for Detroit’s value-setback in April.
The top performing markets in June, as tracked by the Case-Shiller Index were :
- Detroit, Michigan : 6.0 percent gain
- Minneapolis, Minnesota : 4.8 percent gain
- Chicago, Illinois : 4.6 percent gain
However, it should be noted that the Case-Shiller Index pulls from a limited sample set. It does not include condominiums or multi-unit homes in its findings, nor does it account for new construction. These exclusions make a material impact on the results of both Minneapolis and Chicago, as examples. Both cities feature a large concentration of condos.
Overall, though, the June data looks sound. Said a spokesman for the Case-Shiller Index, “The market may have finally turned around.”
Furthermore, home buyers nationwide can corroborate what the Case-Shiller Index has uncovered. Falling home inventory and rising home demand have helped to move home prices higher in many U.S. markets.
Low mortgage rates make new homes affordable and rising rents are turning the Rent vs Buy equation on its head. In July, according to the National Association of REALTORS®, first-time home buyers accounted for 34% of all home resales. This trend is expected to continue into 2013.
As compared to one year ago, today’s home buyers have 8% more purchasing power and, with rising home prices, they’re going to need it.