U.S. home prices continue surge in May

U.S. home prices continue surge in May

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July 30, 2013 at 1:53 PM by AHN
Nathan Andrada – Fourth Estate Cooperative Contributor

Washington, DC, United States (4E) – U.S. home prices rose in May to its highest mark in more than seven years amid signs that the recovery in the country’s residential real estate is gaining traction.

In the 12 months through May, home prices in 10 major cities in the U.S. surged 11.8 percent, according to the home price index of S&P/Case-Shiller. In the broader measure of 20 cities, home values climbed 12.2 percent from a year earlier, compared with economists’ forecast of 12.4 percent gain.

The S&P/Case-Shiller index is calculated using the average of three-month data, which means transactions in March and April influence the result in May. The report also showed the year-to-year increase in April remained unrevised.

Home prices have been boosted by record-low borrowing costs, tight supply and improving labor market. Another reason cited for the rise in home values is expanding household finances, which may drive up consumer spending, the largest contributor in U.S. economy.

The 10-city index climbed 2.5 percent on a seasonally unadjusted basis in May from the previous month, while the 20-city index jumped 2.4 percent using the same comparison.

Each city being tracked in the index recorded an increase in price year-over-year, led by San Francisco’s 24.5 percent increase and Las Vegas’ 23.3 percent gain. New York’s 3.3 percent was the smallest increase in May.

In May, property prices in Dallas and Denver reached record levels, marking the first time a city had topped its prerecession peak, according to the report.
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