US home prices are rising in June 2017 on month-on-month basis. The annual growth rate is 5.8%, which is 0.1 percentage points higher than expected by economists. It was also slightly higher that the 5.7% increase in May. Another key measure that covers home prices in 20 US cities is growing steadily at 5.7%.
Nine cities had stronger annual price growth in June than in May, and western metros remained on top, with annual price gains ranging from 13.4% in Seattle to 7.7% in Dallas. Seattle prices are rising so rapidly that they have left Portland (Number 2) in the dust.
The number of homes for sale, as well as the number of days that a homes were announced on the market fell over the last 4-5 years. Given the current economic conditions and the tight housing market, a reversal of price trends seems unlikely.
The price increases are different from the bubble period, when subprime mortgages led to a housing bust. There is a shortage of properties for sale, causing the prices to steadily rise at more than double the pace of average hourly earnings. Buyers are also relying on historically low mortgage rates to ease the affordability pressures. Cheaper borrowing costs have kept buyer demand strong despite the price increases.