• The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.5 percent annual gain in April, down from 5.6 percent last month.

April’s S&P/Case-Shiller Home Price Index numbers set a fifth consecutive all-time high — a trend that isn’t expected to end in the foreseeable future.

April 2017’s national index comes in at 188.50, a 5.5 percent year-over-year increase from March 2016 and a seasonally adjusted 0.95 percent month-over-month increase.

“Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up,” said S&P Dow Jones Indices managing director and chairman of the index committee David M. Blitzer in a statement. “The increase in real or inflation-adjusted home prices in the last three years shows that demand is rising.

“At the same time, the supply of homes for sale has barely kept pace with demand, and the inventory of new or existing homes for sale shrunk down to only a four-month supply,” he added. “Adding to price pressures, mortgage rates remain close to 4 percent and affordability is not a significant issue.”

10-City and 20-City composite

The 10-City and 20-City composite boasted 4.9 and 5.7 percent year-over-year gains, respectively, and the cities of Portland, Oregon; Seattle and Dallas led the way. Seattle reported a 12.9 percent year-over-year price increase, followed by Portland with a 9.3 percent increase.

Dallas shored up the end of the pack with an 8.4 percent increase.

The 10-City and 20-City composites reported 0.8 and 0.9 percent seasonally adjusted month-over-month increases, and only Cleveland, Ohio reported a negative monthly price change.

Home prices will slow down

Blitzer, once again, is advising real estate professionals to be prepared for when home prices come back down, whether it happens slowly or results in another housing crash.

“The question is not if home prices can climb without any limit; they can’t,” Blitzer warns. “Rather, will home price gains gently slow or will they crash and take the economy down with them? For the moment, conditions appear favorable for avoiding a crash.”

“Housing starts are trending higher and rising prices may encourage some homeowners to sell,” he added. “Moreover, mortgage default rates are low and household debt levels are manageable.”

“Total mortgage debt outstanding is $14.4 trillion, about $400 billion below the record set in 2008. Any increase in mortgage interest rates would dampen demand. Household finances should be able to weather a fairly large price drop.”

About S&P/Case-Shiller U.S. National Home Price Index

The S&P/Case-Shiller U.S. National Home Price Index is a composite of single-family home price indices that is calculated every month; the indices for the nine U.S. Census divisions are calculated using estimates of the aggregate value of single-family housing stock for the time period in question.

The nine divisions are:

  • New England
  • Middle Atlantic
  • East North Central
  • West North Central
  • South Atlantic
  • East South Central
  • West South Central
  • Mountain
  • Pacific

CoreLogic serves as the calculation agent for the S&P/Case-Shiller U.S. National Home Price Index.

Email Marian McPherson

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