The S&P CoreLogic Case-Shiller US National Home Price Index, reported Tuesday, had a 6.1 per cent annual gain in August, up from 5.9 per cent in the previous month. The 10-City Composite annual increase came in at 5.3 per cent, up from 5.2 per cent the previous month.
The 20-City Composite posted a 5.9 per cent year-over-year gain, up from 5.8 per cent the previous month.
On Wednesday, the US Census Bureau said construction spending during September 2017 was estimated at a seasonally adjusted annual rate of US$1,219.5 billion, 0.3 per cent above the revised August estimate of US$1,216.0 billion. The September figure is 2 per cent above the September 2016 estimate of US$1,195.6 billion.
The S&P/Case-Shiller and the Federal Housing Finance Agency Tuesday released their respective home price indices for August 2017. National home prices rose at a faster annual growth rate, while local home price gains varied. Price growth in metro areas across the West region exceeded the national average.
US Home Prices, Sales, Mortgages: Aug and Sept 2017
The Case-Shiller US National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 6.1 per cent in August, faster than a 5.8 per cent increase in July. It was the highest seasonally adjusted annual growth rate since February 2017. Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 8.3 per cent in April, following the 4.5 per cent increase in July, confirming the acceleration in home prices this month.
The year-over-year increase in prices is mostly moving sideways, at around 5 per cent to 6 per cent. In August, the index was up 6.1 per cent Year-over-Year.
In August, local home prices grew at different rates. Many of the faster growing metro areas are located in the West region of the country.
US Home Price-to-Rent Ratio: September 2017
According to Calculated Risk Tuesday, on a price-to-rent basis, the Case-Shiller National index is back to November 2003 levels, and the Composite 20 index is back to September 2003 levels.
In real terms, prices are back to mid 2004 levels, and the price-to-rent ratio is back to 2003 – and the price-to-rent ratio has been increasing slowly.
US Serious Mortgage Delinquency Rate: September 2017
Fannie Mae reported Wednesday that the Single-Family Mortgage Serious Delinquency rate increased to 1.01 per cent in September, from 0.99 per cent in August. The serious delinquency rate is down from 1.24 per cent in September 2016.
The increase in September is probably due to the hurricanes, said Fannie Mae.
These are mortgage loans that are “three monthly payments or more past due or in foreclosure”.
The Fannie Mae serious delinquency rate peaked in February 2010 at 5.59 per cent.
In the short term – over the next several months – the delinquency rate will probably increase slightly due to the hurricanes. After the hurricane bump, maybe the rate will decline another 0.3 percentage points or so to a cycle bottom, but this is pretty close to normal.