Home prices surpass pre-recession peak

U.S. home prices in September surpassed a pre-recession peak hit more than 10 years ago after falling sharply during the housing crisis.

The Standard & Poor’s CoreLogic Case-Shiller rose 5.5 percent in September from a year ago, boosting the home price index to 0.1 percent above the July 2006 record high. 

{mosads}After nearly six years, prices hit their trough in February 2012, dropping more than 27 percent from their high.

“The new peak set by the S&P Case-Shiller CoreLogic national index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance,” said David Blitzer, managing director at S&P Dow Jones Indices.

Since then, the housing market has been gradually recovering behind steady job growth and low mortgage rates.

Yet the market is still struggling to overcome low inventory and lack of credit availability. 

Despite the milestone, Ralph McLaughlin, chief economist for Trulia, said that “crossing this threshold is largely symbolic.” 

“After controlling for inflation, home prices in the U.S. are still about 20 percent below the peak,” he said.

Seattle, Portland and Denver reported the highest yearly gains for the eighth straight month. 

In September, Seattle led the way with an 11 percent annual growth, followed by Portland with 10.9 percent and Denver with an 8.7 percent increase. 

Overall, 12 cities reported greater price increases in the past year.

“Home prices reaching their nominal pre-recession peaks brings mixed news for the housing market,” McLaughlin said. 

“It’s good news for homeowners who are no longer underwater, but not so great news for homebuyers who have seen prices outpace incomes for most of the housing market recovery,” he said. 

Prices in many cities are still below their pre-recession highs, including Miami, Tampa, Phoenix and Las Vegas, which have seen large gains but had big losses to overcome.