Home prices are up 13.3% over the same period last year, according to new data from the S&P Case-Shiller index. The index, which measures single-family home prices in 20 metro markets, showed the highest year-over-year gain since February 2006.
Joel Naroff, president of Naroff Economic Advisors, tells USA Today that the new data is a good sign for future sales and new construction, as higher prices will enable people whose mortgage balances have been higher than their homes’ value to sell and trade up. “It will bring many more houses onto the market,” predicted Naroff.
Robert Shiller, co-founder of the Case-Shiller index, tells CNBC that he doesn’t attribute homebuyer excitement to the increase in home prices. Instead, he believes it is the influence of investors in the real estate market.
“I just don’t see evidence that people think we are launching out on some great new era,” Shiller said on “Squawk on the Street.” “That’s what people thought in the early 2000s. Now, they’re looking at all the problems in Congress and the fact that Fannie and Freddie are propping up so much of the market.”
Once again Las Vegas’ prices were up the highest, 29.1% in September year-over-year. Three California cities also saw gains above 20%, including San Francisco (25.7%); Los Angeles (21.8%); and San Diego (20.9%).
For more on the latest S&P Case-Shiller index, go here.