The latest data from the S&P/Case-Shiller index shows home prices nationwide hit their highest level in October since the financial crisis and recession in October, and continued to rise faster than the national average in Charlotte.
Nationwide, the home-price index rose by 5.6 percent in October on an annualized basis. That’s up from 5.4 percent in September, the previous month.
In Charlotte, one of 20 major U.S. cities tracked by Case-Shiller, prices in October were climbing at a 6 percent annualized rate. That’s ahead of the national average, but behind cities such as Portland (10.3 percent increase), Denver (8.3 percent increase) and Seattle (10.7 percent).
The price index in Atlanta was also up 6 percent, while New York City rose the least, 1.7 percent. No major markets saw a drop in the price index.
“Home prices and the economy are both enjoying robust numbers,” said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “However, mortgage interest rates rose in November and are expected to rise further as home prices continue to out-pace gains in wages and personal income.”
The strong gains in housing prices are hurting affordability, however. Blitzer said affordability measures that are based on median incomes, home prices and mortgage rates have fallen 20 to 30 percent since the housing market bottomed out in 2012.
“With the current high consumer confidence numbers and low unemployment rate, affordability trends do not suggest an immediate reversal in home price trends,” said Blitzer. “Nevertheless, home prices cannot rise faster than incomes and inflation indefinitely.”
In the Charlotte region, the average sales price of a home was $256,736 in October, up 7.6 percent from the average price of $238,518 in October 2015, according to the Charlotte Regional Realtor Association.