US home prices rally to 8-year highs

Home prices are still rising in the US.

According to the S&P/Case-Shiller home price index, prices climbed by 0.84% month-over-month in October. This was a bit stronger than the 0.60% pace expected by economists.

On a year-over-year basis, prices were up 5.54%, which compares to expectations for a 5.60% gain.

"As of October 2015, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels," S&P analysts observed. "Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 11-13%. Since the March 2012 lows, the 10-City and 20-City Composites have recovered 34.9% and 36.4%."

All 20 cities in the 20-City index saw prices increase month-over-month on a seasonally-adjusted basis.

"Generally good economic conditions continue to support gains in home prices," S&P's David Blitzer said. "Among the positive factors are consumers' expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts. Inventories of existing homes have averaged around a five month supply for the past year, a level that suggests a fairly tight market with limited supplies. Sales of new single family homes, despite recent increases in construction, remain mixed to soft compared to the trend in existing home sales."

More to come...