A direct correlation has been drawn between job growth and rising home prices. A tight housing supply, in association with more career opportunities, has contributed to rising home prices at a rate that hasn’t been seen since 2006. According to government data, February witnessed three cities (Phoenix, San Francisco and Las Vegas) demonstrate an increased propensity for year-over-year home price growth while their job growth surpassed the national average.
“Prices are growing faster in markets with stronger job growth,” says Jed Kolko, chief economist for real estate website Trulia.
The Standard & Poor’s Case-Shiller index of the 20 leading cities indicates that home prices received a modest 9.3 percent increase in February from the same time a year ago. Our current standing represents a 1.2 percent increase from January on a seasonally adjusted basis.
Rising home prices were most relevant in the following cities:
- Phoenix (up almost 23%)
- San Francisco (up almost 19%)
- Las Vegas (up almost 18%)
By comparison, New York represents the city with the least growth, with a 1.9 percent annual gain.
Rising home prices continue to reveal modest increases across all 20 cities that were involved in the Case-Shiller Home Price Index. According to David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, “the 10 and 20 City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005.”