U.S. home prices surpassed their 2007 peak in October as the improving job market stirred competition for a dwindling inventory of listings, a Federal Housing Finance Agency index showed.
Prices increased 0.5 percent on a seasonally adjusted basis from September, according to a report Tuesday from Washington. That matched the median estimate of 16 economists, according to data compiled by Bloomberg. The FHFA’s monthly index is now 0.3 percent higher than the level reached in March 2007.
“People are going back into the marketplace and they’re not finding exactly what they want,” said Joel Naroff, a Holland, Pennsylvania-based economic consultant and former chief economist for TD Bank. “The lack of supply is actually restraining sales but for the desirable homes, it’s driving up the prices.”
Sales of previously owned homes fell in October from the second-highest level since 2007, according to the National Association of Realtors. The number of listings was down 4.5 percent from a year earlier.
The FHFA index showed prices nationwide rose 6.1 percent in October from a year earlier. The Mountain area -- including Nevada, Colorado and Arizona -- had the biggest increase, at 8.9 percent. Prices gained 7.8 percent in the Pacific region, with California, Oregon and Washington; and 7.6 percent in the South Atlantic, including Florida, Georgia and Washington, D.C.
The gauge measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae and Freddie Mac. It doesn’t provide specific prices. The median price of an existing single-family home was $221,200 in October, according to the Realtors group.