(NEW YORK) — The recent rise in mortgage rates has not slowed down the housing recovery.
The latest Standard & Poor’s/Case-Shiller index shows that average U.S. home prices rose 12.4 percent in July compared with a year ago — the most since February 2006.
“It’s probably rising about as fast as we’re likely to do,” says S&P economist David Blitzer. “This is the fastest rate of gain we’ve seen really since the boom.”
Home prices in July jumped in all of America’s 20 largest cities for the fourth month in a row.
“Rising interest rates don’t seem to have much impact on home prices yet or on home sales at this point,” Blitzer tells ABC News.
Still, the month-over-month price gains shrank in 15 cities in July compared with the previous month, indicating prices may be peaking.
Home prices soared 27.5 percent in Las Vegas from a year earlier — the largest gain. San Francisco’s 24.8 percent rise was the second largest and the biggest yearly gain for the Bay Area since March 2001.
“We’re at the peak speed and the speed will gradually slow down over the next several months, which is a good thing,” says Blitzer.
Home price inflation has increased over the past year as more buyers entered the market.
“If we’re still going at 12 percent annual rate a year from now we’re going to be worried about a new bubble,” he says.
According to the index, average home prices are about half-way between the peak reached in 2006 and the bottom of the market in 2008.
Copyright 2013 ABC News Radio
John Newsome and Anne Woolsey, CNN