Home prices continued their rise across the U.S. over the past year, but the Brexit and forthcoming presidential election could weigh on future growth.
According to the latest closely watched S&P/Case-Shiller home price index, the average cost of a home in the U.S. increased by 5% in the year to April, down just slightly from an annual rate of 5.1% the previous month.
“The housing sector continues to turn in a strong price performance with the S&P/Case-Shiller national index rising at a 5% or greater annual rate for six consecutive months,” said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.
It's index tracking 10 major cities posted a 4.7% annual increase, down from 4.8% in March, while its 20-city counterpart reported a year-over-year gain of 5.4%, just below the 5.5% recorded in the prior month.
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The stand out cities in April were on the west coast. Portland led the way with annual growth of 12.3%, followed by Seattle and Denver, which witnessed house price increases to the tune of 10.7%, and 9.5% respectively.
“The home price increases reflect the low unemployment rate, low mortgage interest rates, and consumers’ generally positive outlook,” Mr. Blitzer said. “One result is that an increasing number of cities have surpassed the high prices seen before the Great Recession.”
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However, he warned that the the outlook is not without a lot of uncertainty and some risk. In particular, he said that last week’s vote by Great Britain to leave the European Union is “the most recent political concern”, while the U.S. elections in the fall raise uncertainty and will distract home buyers and investors in the coming months.