Real Estate

Home prices reach new all-time highs in August

Key Points
  • The U.S. National Home Price NSA Index rose 6.8 percent in August, according to data from S&P CoreLogic Case-Shiller.
  • "Home prices have reached new all-time highs," S&P Dow Jones indexes managing director David Blitzer said.
Homebuilder stocks rallying after data shows surging home prices

The S&P CoreLogic Case-Shiller home price index rose more than expected in August, hitting an all-time high.

National home prices continued to rise in August, reporting a 6.1 percent annual gain on the S&P's most broad indicator. This was better than the 5.8 percent increase expected by economists polled by Reuters.

"Home price increases appear to be unstoppable," S&P Dow Jones indexes managing director David Blitzer said, before adding that national "home prices have reached new all-time highs."

The latest report was a gain from the 5.9 percent increase in July.

The surge in home prices comes at a time when U.S. share prices have hit record highs. Stocks have been lifted by strong economic growth, a surge in corporate earnings and increasing expectations of tax reform. On Tuesday, stocks traded slightly higher, near all-time highs.

Another key index, which covers home prices in 20 cities across the U.S., registered 5.9 percent in August, up from 5.8 in July.

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Seasonally adjusted, nine of the 20 cities in the composite reported price increases in the year ending August 2017. Seattle, Las Vegas, and San Diego reported the highest year-over-year gains among the 20 cities.

President Donald Trump's goal of 3 percent growth has been realized in two of the three quarters since he took office, and economists say the trend can keep going for at least another quarter and possibly longer.

Third-quarter GDP grew by 3 percent, well above the 2.5 percent expected by economists surveyed by Thomson Reuters and below the 2.8 percent in the CNBC/Moody's Rapid Update. The third-quarter number comes on top of 3.1 percent growth in the second quarter, making for the best back-to-back quarters since 2014 and ending a long streak of sluggish 2 percent growth.

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