Housing prices in metro Detroit and the value of new home construction permits clocked strong year-over-year increases early this summer, with prices for existing homes rebounding faster than the national average.
Data released Tuesday show Detroit-area home prices were 16% higher in June than a year ago, beating the 12% increase for the top 20 metro areas, according to the latest Standard & Poor’s/Case-Shiller Home Price Index, a leading metric for home values.
Metro Detroit home prices are up to levels last seen in early fall 2008. The prices are about 30% off the local market’s peak of late 2005 and early 2006.
The Case-Shiller index defines the Detroit region as Wayne, Oakland, Macomb, Livingston, St. Clair and Lapeer counties.
Only six metro areas in the index saw prices rising faster in June than in the previous month — down from 10 cities in May. This could be a possible indication that rising mortgage rates are having an effect on the housing market.
In the Detroit region, the index showed prices rose 1.6% in June from May, compared to a 3.8% climb in May from April.
“Overall, the report shows that housing prices are rising but the pace may be slowing,” said David Blitzer, chairman of the Index Committee. “As we are in the middle of a seasonal buying period, we should expect to see the most gains. With interest rates rising to almost 4.6%, home buyers may be discouraged and sharp increases may be dampened.”
The Case-Shiller index covers roughly half of U.S. homes and does not report actual home prices.
Realcomp, a Farmington Hills-based multiple listing service, reported a median home sale price in July of $129,000 in the four-county region of Wayne, Oakland, Macomb and Livingston.
The Home Builders Association of Southeastern Michigan also reported Tuesday that the average value in July of a new, single-family home permit rose to $241,206 — a 12% increase from July 2012.
However, the permit data also showed possible signs of a slackening recovery.
The 408 single-family home permits issued in July in Wayne, Macomb, Oakland and St. Clair counties was a 10% decrease from July 2012.
Still, from a 12-month perspective, the 4,226 permits issued between August 2012 and this July was 28% higher than the similar 12-month period that trailed July 2012.
The Home Builders Association said the past 12 months have been the best for construction permits since 2007.