(Bloomberg) – Home prices in 20 U.S. cities rose 5 percent in July from the same month in 2014, propelled by improving demand and limited supply.
Year-to-year increases in the S&P/Case-Shiller index have hovered in a narrow range around 5 percent since February, indicating the rebound in residential real estate is stable. The median estimate of economists surveyed by Bloomberg called for a 5.2 percent year-over-year gain. Nationally, prices rose 4.7 percent over the 12-month period, the group said Tuesday in New York.
Scant inventory of homes on the market is underpinning property values, while historically low mortgage rates are helping keep real estate within reach. Steady job gains, rental inflation and an easing of still-tight credit standards also should help prospective buyers find the wherewithal to make a purchase.
“Home prices are rising but not at a rate that’s necessarily damaging to affordability and confidence in the market,” said Tom Simons, an economist at Jefferies LLC in New York, who correctly projected the year-over-year advance in prices. “The market overall is doing quite well.”