According to the latest S&P/Case-Shiller Home Price Index, US house prices rose 12.4% over the 12 months to the end of July, the biggest annual increase since February 2006.
The S&P/Case-Shiller Home Price Index measures single-family home prices across 20 cities, with 13 cities showing a rising annual growth rate.
Last week, the US Federal Reserve decided to maintain its effort to boost the economy, which involves buying $85 billion worth of assets every month.
That scheme, known as quantitative easing (QE), is credited with boosting the housing market last year by driving down mortgage rates to record lows.
However, David Blitzer from S&P Dow Jones Indices said that effect had worn off.
US house prices rose 12.4 percent over the 12 months to the end of July 2013
“Following the increase in mortgage rates beginning last May, applications for mortgages have dropped, suggesting that rising interest rates are affecting housing.
“The Fed’s announcement last week that QE3 bond buying will continue for the time being may have only a limited, though favorable, impact on housing,” he said.
Prices rose 0.6% on a seasonally adjusted basis in July compared with the month before, which was lower than analysts’ forecasts and down from June’s increase of 0.9%.
Las Vegas saw the biggest annual gain of 27.5%, while San Francisco, Los Angeles and San Diego all saw rises of more than 20%.
But the survey points out that house prices in those cities are still well below the peaks hit before the 2008 financial crisis.
Of the 20 cities surveyed, New York saw the lowest annual increase of 3.5%.
Detroit, which filed for bankruptcy in July, saw an annual growth rate of 16.9%. However, the report says that Detroit is the only city where house prices are still below the levels reached in January 2000.
Minutes of the Federal Reserve’s July meeting revealed few clues about the central bank’s timeline for unwinding its extraordinary efforts to support the US economy.
Officials said they were “broadly comfortable” with plans to scale back the Fed’s $85 billion a month bond-buying programme.
However, the timing remains murky.
Almost all agreed a change in the programme was “not yet appropriate” but “a few” favored swift action.
Fed officials said that recent economic data had been “mixed”, which could indicate that plans to begin the so-called “taper” might be put off if the economy were to weaken.
The central bankers will reconvene on September 17 for a two-day meeting, which will be followed by a press conference by chairman Ben Bernanke.
Minutes of the Federal Reserve’s July meeting revealed few clues about the central bank’s timeline for unwinding its extraordinary efforts to support the US economy
The Dow tumbled by more than 100 points after the minutes were released, although quickly recovered. The S&P 500 and Nasdaq also fell briefly.
After Ben Bernanke hinted at plans to end the bank’s accommodating monetary policy in June, mortgage rates jumped sharply, threatening a fragile housing recovery.
Fed officials acknowledged that market reaction to discussion of an easing of expansionary monetary policy has been volatile.
“Meeting participants pointed to heightened financial market uncertainty about the path of monetary policy and a shift of market expectations toward less policy accommodation,” according to the minutes.
The September Federal Open Market Committee meeting will occur after a spate of economic data has been released, including another jobs report as well as revised second-quarter GDP estimates.
Officials hope this new data will help give them a better sense of when tapering should begin, which many investors believe will happen sometime before the end of this year.
Ben Bernanke has indicated that the timing of the Fed’s decision will be dependent on a healthy US economy.
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