Los Angeles-area home prices jump in May, Case-Shiller says

Home prices in Los Angeles and Orange counties jumped 6.1% in May, according to a closely watched gauge released Tuesday.

The 12-month gain represents a slight pickup from the 6% increase recorded in April and comes as home sales have jumped both locally and nationally. U.S. prices were up 4.4%, the Standard & Poor’s/Case-Shiller index showed.

Economists say sustained job growth has given more Americans the confidence to purchase a house, leading to a strong spring selling season. In June, sales of previously owned homes — the largest segment of the market — hit the highest level in more than eight years, according to the National Assn. of Realtors. And in Southern California, home sales surged 18.1% compared with a year earlier, data from CoreLogic showed.

Still, not all segments of the housing market are as strong.

David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said housing construction has been less than stellar and first-time home buyers still struggle to gain a foothold in the market.

Partly because of that difficulty, the nation’s home ownership rate is now at the lowest in decades. The seasonally adjusted rate fell from 63.8% in the first quarter to 63.5% in the second quarter, the Commerce Department said Tuesday.

Over the next several years, the rate of home price increases is likely to slow, given the lack of wage growth, Blitzer said.

The Case-Shiller numbers out Tuesday lag behind other real estate reports, but they are widely considered the most reliable reading on home values.

The index, created by economists Karl E. Case and Robert J. Shiller, compares the latest sales of detached houses with previous sales and accounts for factors such as remodeling. San Diego home prices rose 4.8% compared with a year earlier, while in San Francisco home prices jumped 9.7%.

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