November 28, 2017 – The 20-city S&P/Case-Shiller index is a measure of existing home values across 20 metropolitan areas throughout the U.S. Home values have a broad impact on the economy, including the housing and consumer sectors.
The 20-city Case-Shiller index rose a seasonally adjusted 0.5% in September, beating expectations of a 0.4% increase and 0.1% higher than August’s revised reading of 0.4%. Home prices in Seattle, Las Vegas, and San Diego lead in year-over-year price increases. The unadjusted index year-over-year prices are up 6.2%, above August’s revised 5.8%.
September’s increase in the Case-Shiller continues on the trend on increasing home prices that started around 2012. When home prices are rising in value, it encourages home builders to start new construction and build homes, therefore boosting the economy. However, rising prices can lead first-time home buyers to hold off on purchasing a home. Every buyer that holds off on buying a house is withholding money from the economy. Conversely, the sellers of the homes benefit from higher home prices in the form of higher profits.