The housing prices in the United States stabilized in December, reflecting an environment of weak sales and low supply.
According to the Case-Shiller Standard & Poor’s / index that summarizes the average prices in 20 cities; they rose 4.5% in December compared with the same month last year. That represents an increase compared to 4.3% in November and the same applies to the increase in October. This slight increase was reduced after price increases declined for 12 consecutive months.
There are fewer homes for sale, which drives up prices and put housing out of reach of many stakeholders. Prices rise faster than wages of most Americans, slowing sales though the job market strengthens, increases consumer confidence and mortgages remain low. However, slight increases are more sustainable than the double-digit increases recorded last year.
Lea: Mistakes cost money when selling your home.
The Case-Shiller index covers almost half of US homes, compare the prices that were in January 2000 and produced an average of three months. December’s figures are the most recent one available.
The number of homes for sale in December equivalent to 4.4 months of sales, the lowest level in nearly two years. Six months of supply is the amount that reflects a healthy housing market.
“The recovery of the housing market is faltering,” said David Blitzer, chairman of the committee that produced the S & P index. “While prices and sales of previously owned homes are close to normal, construction and sale of new homes remains weak”.
The 20 cities included in the index recorded higher prices than a year earlier. The largest increases were in San Francisco, where prices rose 9.3%, and Miami, where they grew 8.4%. Chicago reported the lowest increase, 1.3%.
Read: The sale of new homes rose 0.7% in October.
The December increase far exceeds the growth of wages. The average hourly wage increased more in January than in the previous month, but the increase was only 2.2% above a year ago. Wage increases have stagnated at that level for most of the time since the 2008-2009 recession times.
Sales of previously owned homes fell last year after two years of recovery. That has led many economists predict a rise in sales of 2015, but so far there are only few signs of this.
In January the number of existing homes for sale fell 4.9% to an annual adjusted rate of 4.82 million, the slowest pace in nine months, said Monday the Association of Realtors.
Last week the Commerce Department reported that construction of new homes rose 2%.
Low mortgage rates and strong employment growth can boost sales at the end of the year. The average 30-year rate was at 3.76% last week, according to Freddie Mac specialized company. This has increased in recent weeks but is below the average of 4.33% a year ago.