WASHINGTON — U.S. home prices rose at the fastest pace in more than three years in September with Las Vegas and two other cities notching the highest annual gains.
The Standard & Poor’s CoreLogic Case-Shiller national home price index released Tuesday rose 6.2 percent in September from a year earlier, the largest gain since June 2014. In 13 of the 20 cities tracked by the index, yearly price gains in September were faster than in August.
Home buyers are desperately bidding up prices because so few properties are available. The number of homes for sale in September was the fewest for that month on records dating back to 2001, according to the National Association of Realtors. And home builders aren’t yet putting up enough new homes to reduce the supply crunch.
Besides Las Vegas, Seattle and San Diego reported the highest year-over-year gains. Home prices jumped 12.9 percent in Seattle, 9 percent in Las Vegas and 8.2 percent in San Diego. Las Vegas, one of the hardest-hit cities in the housing bust, has been making a comeback since prices bottomed out in 2012.
Southern Nevada was a poster child for the mid-2000s bubble, with skyrocketing home prices and booming construction. Today, resale prices aren’t rising as fast as they did at the peak of those years, but Las Vegas Valley broker Scott Beaudry said it “still concerns” him to see the current high growth rate, given how badly it all ended last decade.
Shrinking inventory and rising demand are pushing up prices. Beaudry, owner of Better Homes and Gardens Real Estate Universal, said prices aren’t in bubble territory but that he’d like to see them cool off “a little bit” to avoid going there.
Home prices rose in all 20 cities in September. The smallest gains were in Washington, D.C., where prices rose 3.1 percent; Chicago, with a 3.9 percent gain; and Miami, at 5 percent.
Unemployment is low and the economy is growing at a solid clip, fueling demand for homes. Mortgage rates also remain historically low, with the average rate on a 30-year mortgage below 4 percent.
Yet Americans are remaining in their homes longer, according to a recent survey by the Realtors. Many are reluctant to sell because there are so few other homes to buy.
Builders are responding to the pent-up demand by building more houses. The construction of new homes jumped nearly 14 percent in October to the fastest pace in a year. But home builders are struggling to find the workers and land they need to ramp up construction more quickly.
Builders closed 882 new-home sales in Clark County in September, bringing the year’s total to 6,644, up 16 percent from the same nine-month period last year, according to Home Builders Research.
The median sales price of September’s closings was a record $355,000, up 10 percent year-over-year
The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The September figures are the latest available.
Review-Journal writer Eli Segall contributed to this report.