Home values in 20 U.S. cities rose at a faster pace in the year ended October as lean inventories of available properties combined with steadily improving demand. The median projection of 21 economists surveyed by Bloomberg called for a 5.6 percent advance. A limited supply of properties for sale has helped prop up home values, boosting the household wealth levels of U.S. homeowners in the process.
Job gains and more household formation “will continue to boost demand, and prices should continue to stay within this current healthy range in 2016,” Anika Khan, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. And even after the Federal Reserve’s first interest-rate increase in almost a decade, “it’s still going to be an environment where overall mortgage rates will remain low.”
“We’re not at a scary point in any way — prices are creeping up, but tight supply is definitely keeping them a little more elevated than one would hope,” Sophia Kearney-Lederman, an economic analyst at FTN Financial at New York, said before the report. “There are certain hot-spot areas, particularly on the coasts and out west.”
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