U.S. home prices rose slightly in November from the previous month, posting a 5.6 percent annual gain thanks to rising disposable personal income per capita, decreasing unemployment, and low interest rates.
The S&P/Case-Shiller U.S. National Home Price Index, which measures all nine U.S. census divisions, was up 5.6 percent on an annual basis in November from 5.5 percent in October.
The S&P CoreLogic Case-Shiller 20-City Composite index also rose 5.3 percent year over year, up from October’s 5.1 percent. Out of the 20 cities, Seattle, Portland, and Denver continued to see the largest year-over-year gains, with Seattle leading the way as prices rose 10.4 percent year over year.
A Reuters poll showed economists expected the 20-city index to rise 5.1 percent in November compared to a year ago.
“One can argue that housing has recovered from the boom-bust cycle that began a dozen years ago,” David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, said in a press release.
Blitzer cited the new administration’s pro-growth agenda, infrastructure spending plans, and tax reform proposals as factors that could affect the housing market.
“Mortgage rates have increased since the election and stronger economic growth could push them higher. Further gains in personal income and employment may increase the demand for housing and add to price pressures when home prices are already rising about twice as fast as inflation,” he said in the release.