US home prices surpassed 2006 peak in September

After four years of recovery, homeowners dig out of recession-era hole: Case-Shiller

Dec.December 01, 2016 10:00 AM

They’re baaaack.

After 10 long years, U.S. home prices finally climbed back to the record peak set in mid-2006 before the recession decimated the market.

The average price for a home in September climbed 0.1 percent higher than the peak of July 2006, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Indices.

The new high comes amid a four-year recovery from the nadir of the market in 2012, when prices had fallen 27 percent from their record high, the Wall Street Journal reported. The index remains roughly 16 percent below the peak when adjusted for inflation.

While it’s true that housing has lagged behind other sectors in the economy in the past few years, there are signs that there’s more room to run. In October, single-family housing starts rose 11 percent and the share of first-time buyers climbed to 33 percent from 31 percent a year earlier.

Case-Shiller co-developer Robert Shiller of Yale University said many homeowners who are finally seeing the equity return to their homes will get a psychological boost from the new record in values.

“It creates an atmosphere that the sky is the limit,” he said.

Others, however, expressed caution that pricing may be getting away from economic fundamentals.

“It’s not clear with the degree of [economic] growth that we’ve had that we should have expected prices to rise this much,” Fannie Mae chief economist Doug Duncan said. “We have a caution light on.”

Historically low interest rates are one reason home prices have risen so quickly, though rates could rise in the future and slow down growth. [WSJ]Rich Bockmann

Related Articles

Scott Laurie, chief executive of Olson Co. and Christopher Thornberg, founding partner of Beacon Economics

How slow can you go? Statewide homebuilders tap brakes on new projects amid rising costs

CoreLogic analyst Andrew LePage

LA home sale prices just set another record high

John Burns (Credit: iStock)

As mortgage rates fall, 250K more SoCal households can afford starter homes

Southland Regional Association of Realtors President Dan Tresierras and the San Fernando Valley (Credit: Wikipedia)

San Fernando Valley might be selling homes slowly, but prices just won’t stop rising

CoreLogic Research Analyst Andrew LePage

Peak LA: Home prices tie all-time high, but fewer properties sell

Andy Reid, the President of MetroStudy

The great SoCal slowdown: Homebuilding drops 18%

Reports on Housing founder Steven Thomas

Homes flood the SoCal market, but buyers aren’t biting

LA homeowners’ $760B in real estate equity is tops in nation: report