Home prices in 20 cities rose at a steady pace in April from a year earlier, a sign demand for residential real estate remains solid enough to support both buyers and sellers, data from New York-based S&P/Case-Shiller showed Tuesday.
The 20-city property values index increased 5.4% from April 2015. On a 12-month basis the national home-price gauge rose 5% in April compared 5.1% for the same period ended in March. The index increased on a seasonally adjusted 0.5% from March, which was the smallest gain since September.
Steadily rising home prices not only boost the incentive for buyers to jump in but also may encourage current owners to put their properties up for sale, helping maintain a healthy churn in the market. Faster wage gains will be needed to give first-time buyers the income needed to keep pace with home prices and extend the lifespan of the residential real estate recovery.
"The home price increases reflect the low unemployment rate, low mortgage interest rates and consumers' generally positive outlook," David Blitzer, chairman of the S&P index committee, said in a statement. Still, political
There is a fear first-time homebuyers are being priced out of the market. "I've never had a homeowner complain that their house has gone up in value, but I have had first-time homebuyers complain that prices are going up and keeping them out of the market," Ralph McLaughlin, chief economist at Trulia in San Francisco, said before the report. "It depends what side of the coin you're looking at with regards to whether rising home prices are a good thing."
All 20 cities in the index showed a year-over-year gain, led by a 12.3% advance in Portland, Ore., and a 10.7% increase in Seattle.
After a seasonal adjustment, Detroit had the biggest month-over-month gain at 1%; Cleveland, San Diego and San Francisco posted declines from March.
