Photo: Larry Johnson/Flickr
US home prices nudged upwards in August, according to financial services firm Standard & Poor’s Case-Shiller national home price index.
In August, the national index value sat 175.43, up 4.7 percent from where it was at the same time the year before.
A value of 100 represents what the index read as of January 2000. Therefore, the current national index, named after the two economists who developed the approach for the index, represents a price appreciation of about 75 percent since that time.
The difference in price tracked when a single-family home changes hands twice via an arms length transaction — in other words, two unrelated independent parties each acting in their own best interest — forms the basis of the index.
Month-over-month, the national index, which covers all nine census divisions in the US, was up 0.3 per cent from July.
Meanwhile, the 20-City Composite index, which covers major American cities, was 182.47. This represents a 5.1 percent increase year-over-year and is 0.3 percent higher than it was in July.
“A 5% price increase in the value of a house means more today than it did in 2005-2006, the peak of the housing boom,” said David Blitzer, managing director of S&P Dow Jones Indices, in a statement.
The reason, according to Blitzer, is that inflation rates were higher back then then. “A notable part of today’s economy is the continuing low inflation rate,” he said.
Among the score of cities tracked, all had August indexes that were higher than they were a year ago. Only one city saw a month-over-month decline in August: San Francisco.
But it was the Golden Gate City, with an index of 215.37, and Denver, with an index of 172.82 that saw the greatest year-over-year index gains. In August, the index for both these cities was up 10.7 percent from what it was in the eighth month of 2014. Portland wasn’t far behind. It experienced a 9.4 percent year-over-year index increase to 186.52.
The smallest gains were seen in New York. There, the index was 1.8 percent higher year-over-year in August, lifting it to 181.16.