Home prices in the New York metropolitan area continue to rise, but at the slowest pace in the nation, the S&P CoreLogic Case-Shiller Indices said Tuesday.
Single-family home values in the region, which includes North Jersey, rose 3.1 percent in the 12 months ended December. That compares with a national increase of 5.8 percent.
“Driven in part by a healthy economy and near-historic low inventory, the U.S. housing market is showing signs of picking up steam,” said Ralph McLaughlin, chief economist for the real estate website Trulia.
Home values are rising fastest in the West, led by Seattle, Portland and Denver, all up by 8.9 percent or more. By contrast, values are up less than 5 percent in Chicago, Washington, D.C., and Cleveland, according to Case-Shiller.
The numbers mean that, on average, a North Jersey homeowner who purchased a place in December 2004 would have broken even on the purchase in December 2016, a dozen years later. A homeowner who bought at the market’s peak, in mid-2006, would have a place that’s still worth 14 percent less than he or she paid.
Nationally, homeowners who bought at the 2006 peak are, on average, back to what they paid.
Home prices in New Jersey have lagged behind because of slow job growth and a continued backlog of distressed properties in the foreclosure pipeline.
Case-Shiller does not break out home prices by county, but according to the New Jersey Realtors, single-family prices in Bergen and Passaic counties were essentially flat in 2016, at a median $460,000 in Bergen and $295,000 in Passaic.
David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices, said that while home prices are rising nationally, “the speed is not alarming.”
He said buyers are competing for a tight inventory of homes.
“While sales of existing single-family homes passed five million units at annual rates in January, the highest since 2007, the inventory of homes for sales remains quite low, with a 3.6-month supply,” he said.
Many analysts expect interest rates to rise this year, which would make it more difficult for first-time buyers to get into the housing market.
“As mortgage interest rates rise, larger, more expensive markets will continue to become more unaffordable, which will cause home-price growth to slow,” said Svenja Gudell, chief economist for the real estate website Zillow.
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