August was a record breaking month for real estate. Construction spending hit a four and half year high, home prices had their largest annual gain in more than seven years and foreclosures are at an eight year low.
U.S. construction spending approached a four and half year high in August, boosted by increases in both private and public outlays. Construction spending increased .6% to an annual rate of $915.1 billion, the highest level since April 2009, the Commerce Department said yesterday. Construction spending in August was lifted by a .4% rise in public construction projects. That was the fourth consecutive month of gains and came even as federal government spending on construction projects tumbled. There was also a boost from spending on private construction projects. Spending on private residential projects jumped 1.2% to a five-year high, showing little sign that higher interest rates are slowing activity.
U.S. home prices had their largest annual gain in more than seven years in August. The Case-Shiller index of property value in 20 cities increased 12.8% from August 2012 after a 12.3% gain in the year ended in July. All 20 cities in the index showed a year-over-year gain, led by a 29.2% increase in Las Vegas. Values advanced 25.4% in San Francisco and 21.7% in Los Angeles. As of August, average home prices in the U.S. were back to their mid-2004 levels, and the 20-city index was up 22.7% from its March 2012 low. Tight inventories have boosted prices as buyers compete for a limited number of properties for sale.
According to RealtyTrac, August’s initial foreclosure filings fell 44% to 55,575, just below the 56,063 that were recorded in October 2005. The foreclosure crunch began in summer 2006, at about the same time that housing prices hit their peak. “This is a strong indicator that the crisis is over,” said Daren Blomquist, Vice President at RealtyTrac.
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