U.S. home prices rose 5.7 percent in the third quarter from a year earlier as buyers competed for a tight supply of properties on the market.
Prices climbed 1.3 percent on a seasonally adjusted basis from the previous three months, the Federal Housing Finance Agency said in a report Wednesday from Washington.
Home prices are being driven up by increased demand as the job market improves and the inventory of listed properties remains short. There were 2.21 million previously owned homes for sale at the end of September, down 3.1 percent from a year earlier, according to the National Association of Realtors. The average supply for the third quarter was 4.9 months, down from 5.5 months from the same period in 2014.
“The factors that have contributed to extraordinary price growth over the last few years — low interest rates, tight inventories, strong buyer confidence and improving income growth — continued to drive prices upward in much of the country,” Andrew Leventis , the FHFA’s principal economist, said in a statement. “However, as prices continue to rise, reduced affordability will be a stronger market headwind.”
Prices in September rose 0.8 percent on a seasonally adjusted basis from August, according to the FHFA. The average estimate of 19 economists was for a 0.4 percent gain.
The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn’t provide specific prices. The median price of an existing single-family home in the U.S. was $229,000 in the third quarter, up 5.5 percent from a year earlier, according to the Realtors group.
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