The area saw an increase in sales prices of 8.2 percent in April from a year earlier, following annual gains of 8.4 percent in March and 8.5 percent in February, according to the closely followed Case-Shiller monthly real estate report series. That's the lowest year over year gain in 5 months and once again Chicago finds itself 4th from the bottom in the ranking of the metro areas. Home prices jumped 12.9 percent in Seattle, 9.3 percent in Portland and 8.4 percent in Dallas.
Seven cities reported greater price increases in the year ending April 2017 versus the year ending March 2017.
David M. Blitzer, chairman of the index committee at S&P, said in a statement that he's not anxious about another national housing downturn, citing low levels of household debt and mortgage default rates.
"As home prices continue rising faster than inflation, two questions are being asked: Why, and, could this be a bubble?" said Blitzer in a statement.
The National Association of Realtors reported last week that the inventory of existing homes available for sale rose in May by 2.1 percent to 1.96 million from the previous month.
"We're getting affordability issues in some markets that have seen an increasing rise in prices", said Scott Anderson, chief economist at Bank of the West, adding that he anticipates moderate home appreciation gains in the future.
The ever-climbing prices come as buyers are competing over a slim supply of homes on the market. Rather, will home price gains gently slow or will they crash and take the economy down with them? Housing starts are trending higher and rising prices may encourage some homeowners to sell.
He said increased construction, a low rate of mortgage defaults and manageable household debt should prevent a crash. Household finances should be able to weather a fairly large price drop.
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.
And David M. Blitzer, chairman of the committee that publishes the Case-Shiller index, suggested Tuesday the rising rates could have the opposite effect.