WASHINGTON (AP) — U.S. home prices rose sharply in August from a year ago, a trend that is thwarting many would-be buyers and potentially slowing sales.
The Standard & Poor’s CoreLogic Case-Shiller national home price index, released Tuesday, increased 6.1 percent in August from a year earlier. That’s higher than the 5.9 percent annual gain in July. In 9 of the 20 cities tracked by the index, yearly price gains in August were faster than in July.
Fewer Americans are selling their homes, and builders aren’t putting up enough new houses to meet burgeoning demand. That has forced home buyers into bidding wars, lifting prices. Mortgage rates remain at historically low levels, making it easier to afford higher costs. That has resulted in rising prices even as sales have slipped this year.
“Home price increases appear to be unstoppable,” says David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. Housing costs are climbing much faster than overall inflation or wages.
Sales of existing homes ticked up in September after falling for three months. Still, sales have fallen 1.5 percent from a year ago, according to the National Association of Realtors, the first year-over-year decline since July 2016.
Yet the declining sales figures don’t reflect a lack of demand. A typical home in September was snapped up just 34 days after listing, down from 39 days a year ago. Surveys show most renters consider it a good time to buy a home, and increasing numbers of millennials are employed and entering prime home-buying years.
Those buyers simply aren’t finding many options, particularly among less-expensive homes. The number of homes for sale in September was 6.4 percent lower than a year ago. There were just 1.9 million existing homes for sale that month, the fewest in any September since the Realtors began tracking the figure in 2001.
With so few properties available, more Americans are paying list price for homes or higher. Forty-two percent of buyers have done so this year, according to a separate report from the Realtors’ group. That’s the highest on records dating back to 2007.
The survey also found that Americans are staying in their homes longer, one reason that fewer homes are for sale. The typical seller this year owned their home for 10 years before listing it, the same as last year. But before 2009, the figure was usually six years, the Realtors said.
Single women now make up the second-largest group of home buyers, accounting for 18 percent of purchases, the survey found. Married couples, at 65 percent, are the largest. Single men made up 7 percent of home buyers this year.
The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The August figures are the latest available.