SOURCE: BMO Harris Bank

BMO Harris Bank

November 26, 2013 12:30 ET

BMO: Higher U.S. Home Prices Could Translate to Higher Confidence and Spending

CHICAGO, IL--(Marketwired - Nov 26, 2013) - The S&P Case-Shiller house price index for September 2013 rose once again in all 20 major metropolitan areas, surpassing consensus expectations. The 20-City Composite of metropolitan areas rose 1.0 percent, which came in just above the estimated 0.9 percent.

For the second month in a row, all 20 areas saw a rise in prices. Year-over-year prices rose at 13.3 per cent, the fastest pace in 7.5 years. The strong numbers and consistent upticks can largely be contributed to low inventory, according to Michael Gregory, Deputy Chief Economist and Head of U.S Economics, BMO Capital Markets.

"What we're seeing are fewer homes for sale, and the high demand continues to push prices upward," said Mr. Gregory. "While this trend is welcomed by homeowners, who are seeing the value of their homes rise month after month, it's not received nearly as well by those looking to buy a home in the near future. However, overall affordability still remains historically attractive."

"The FHFA's house price measure didn't see the same jump as Case-Shiller, coming in at only 0.3 percent higher than the numbers from last month," said Mr. Gregory. "However, the measure is up 8.5 percent year-over-year, so we consider this incremental increase to be part of an overall good news story."

   
  S&P Case-Shiller Home Price Indices
   
  Metropolitan Area   August/July Change (%)   Y/Y Change (%)
  Atlanta   1.9   18.7
  Boston   1.3   7.5
  Charlotte   0.4   7.8
  Chicago   0.7   9.7
  Cleveland   1.6   5.0
  Dallas   0.9   9.0
  Denver   0.8   9.9
  Detroit   1.4   17.2
  Las Vegas   1.6   29.1
  Los Angeles   1.2   21.8
  Miami   1.1   14.3
  Minneapolis   0.9   10.1
  New York   0.5   4.3
  Phoenix   1.4   18.6
  Portland   1.0   13.5
  San Diego   1.3   20.9
  San Francisco   1.4   25.7
  Seattle   0.7   13.2
  Tampa   1.0   145
  Washington   0.7   7.0
           

Source: S&P Dow Jones

About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $549 billion in assets (as of July 31, 2013).

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