Reasons For Further Growth Of U.S. Real Estate Prices

During the last several years, US housing prices have been gradually rising and that is reflected in the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. There are many reasons for price appreciation, including low mortgage rates and a significant decrease in housing prices after The Great Recession. However, current circumstances point out to another driver of price growth. This driver is simply a lack of homes for sale. Based on a comparison of Monthly Supply of Houses and New One-Family Houses Sold, one can easily see that demand for houses is rising but inventories are decreasing that is causing price growth. Moreover, it is important to know that the monthly volume of total housing starts is staying approximately at the same level since April 2015. Consequently, due to the growing demand for houses for sale, housing inventories are decreasing.

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