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US house prices up 12.1%

paulajohn
Written By:
Posted:
28/08/2013
Updated:
28/08/2013

Property prices in the United States have risen by an average of 12.1% in the course of the last year.

According to the Standard & Poor’s/Case Shiller index, which measures prices changes in 20 cities, property values grew in all areas. However, the average figure masks regional variations, with house prices in Las Vegas and San Fransisco recording particularly large increases of nearly 25% over the past 12 months.

The average 12.1% annual rise in June was slightly down on the 12.2% growth recorded in May.

“Overall the report shows that housing prices are rising but the pace may be slowing,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

“With interest rates rising to almost 4.6%, home buyers may be discouraged and sharp increases may be dampened.”

Mortgage rates in the US rose markedly in May as the Federal Reserve suggested that it was considering reducing its version of the Quantitative Easing programme which pumps money into the economy.

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Experts said it was too early to tell whether higher borrowing costs would put a brake on the housing market.

“The volatility of the numbers mean it is much too soon to call this definitive evidence of a slowdown in the pace of price increases, still less evidence of the impact of the rise in mortgage rates,”said Ian Shepherdson, chief economist at Pantheon Macroeconomics told the BBC.

“We will be watching these data closely over the next few months. For now, though, we think these numbers could simply be reflecting a small but real change in the balance of demand and supply.”