Index Shows Prices Up Nearly 6% From November 2014
Standard & Poor’s reports the S&P/Case-Shiller 20-city home price index rose 5.8 percent on an annual basis in November, an acceleration from the 5.5 percent rate reported in October. Economists had expected the index to come in at 5.7 percent, Bloomberg News reported. Analysts attributed the index’s increase to low inventory, which helps “support household wealth for homeowners” and offsets “some of the damage from the drop in stock prices.” CNBC reported that David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said in a statement, “Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market.” The Wall Street Journal reported that economists warned the low inventory of new homes is depressing sales volume and increasing prices. Real estate brokerage Redfin economist Nela Richardson said, “Even in the first few weeks of January, people are ready to buy and they just can’t find anything.” The AP reported that the acceleration in home price growth was “fueled by solid hiring growth, historically low mortgage rates and a shortage of houses on the market.”
What This Means For Small Businesses
The housing market has been slower to recover following the recession. In the early part of 2016, small businesses in construction and housing, in particular, may continue to see uneven growth. As NFIB Chief Economist William Dunkelberg pointed out in the latest Small Business Economic Trends report, “With weak expectations for sales and business conditions, owners see no need to add to current stocks.” This could translate into slower growth for a number of sectors, including construction.
Barron’s Blog also reported the story.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.