Home prices jumped in all of America’s 20 largest cities in July for the fourth month in a row, despite the recent rise in mortgage rates.
The latest Standard & Poor’s Case Shiller Index out today found that average US home prices rose 12.4 percent in July compared with a year ago, the most since February 2006.
“It’s probably rising about as fast as we’re likely to do,” says S&P economist David Blitzer. “This is the fastest rate of gain we’ve seen really since the boom.”
Rates have risen a percentage point on the 30-year fixed mortgage since mid-summer amid concern that the Federal Reserve will curtail its bond-buying that has kept rates low to stimulate the economy.
“Rising interest rates don’t seem to have much impact on home prices yet or on home sales at this point,” Blitzer told ABC News.
Still, the month-over-month price gains shrank in 15 cities in July compared with the previous month, indicating prices may be peaking.
Home prices soared 27.5 percent in Las Vegas from a year earlier, the largest gain. San Francisco’s 24.8 percent rise was the second-largest and the biggest yearly gain for the Bay Area since March 2001.
“We’re at the peak speed and the speed will gradually slow down over the next several months, which is a good thing,” says Blitzer. Home price inflation has increased over the past year as more buyers entered the market.
“If we’re still going at 12 percent annual rate a year from now we’re going to be worried about a new bubble.
According to the Case Shiller index, average home prices are about half-way between the peak reached in 2006 and the bottom of the market in 2008.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow