Home prices continued to climb due to depressed inventory and slow construction activity.
The S&P CoreLogic Case-Shiller National Home Price Index rose 6.2% in November, up from 6.1% in the previous month — marking the 16th consecutive month of at least 5% year-over-year growth. The 20-City Composite posted a 6.4% year-over-year increase, beating analysts’ estimate of 6.3%.
“Home prices continue to rise three times faster than the rate of inflation,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices in a press statement. “Without more supply, home prices may continue to substantially outpace inflation.”
Low inventory levels and slow construction of new homes continue to put pressure on home prices. Last week, the National Association of Realtors reported total housing inventory at the end of December fell 11.4% to 1.48 million homes, marking 31 consecutive months of year-over-year declines.
“From 2010 to the latest month of data, the construction of single family homes slowed, with single family home starts averaging 632,000 annually,” according to Blitzer. “This is less than the annual rate during the 2007-2009 financial crisis of 698,000, which is far less than the long-term average of slightly more than one million annually from 1959 to 2000 and 1.5 million during the 2001-2006 boom years. “
Home prices in Seattle continued to lead the pack as the city reinforces its position as the hottest housing market in 2017. The city reported a 12.7% increase in price, the highest year-over-year gain in November. Amazon’s headquarters city has led the S&P CoreLogic Case-Shiller Home Price 20-City Composite Index each month since September 2016.
Amanda Fung is an editor at Yahoo Finance.