More good news on the housing market. This morning, the S&P/Case-Shiller Home Price index posted its biggest annual increase since 2006—just before the housing market crash.
Home prices in all 20 metro areas included in the index rose for the second month running. Phoenix led, with a 23% annual increase followed by San Francisco (18.9%), Las Vegas (17.6%) and Atlanta (16.5%).
Still, Robert Shiller, co-creator of the index, is cautious. “There’s a lot of excitement in the housing market now but it might be just short term,” he tells The Daily Ticker.
Related: The Recovery in Housing is Behind Us: David Rosenberg
Shiller says the housing market is operating in an “abnormal economy” where the Federal Reserve is buying $40 billion worth of mortgage securities and $45 billion worth of Treasury notes each month. This has driven mortgage rates to record lows.
According to Freddie Mac’s weekly survey out last Thursday, the average rate for a 30-year fixed rate mortgage is a record low 3;4%;
Read More »from Robert Shiller: Home Prices Will Remain Relatively Stagnant For Next 10 Years