The numbers: The S&P/Case-Shiller national index rose a seasonally adjusted 0.7% in the three-month period ending in October. It was up 6.2% compared to the same period a year ago.
The 20-city index also rose a seasonally adjusted 0.7% for the month and it’s up 6.4% for the year.
Both indexes advanced 0.2% in raw or unadjusted terms.
What happened: Prices rose in more than half of the largest U.S. markets, led by San Francisco and Las Vegas, reflecting once again the high cost of U.S. housing, especially in tech hotbeds. The Case-Shiller national index is now 6% above its prior year-to-year peak.
The 20-city index that skews toward the biggest metro areas is still 1.3% below its all-time high, though. Big cities generally experienced even bigger booms before 2006 and the ensuing housing bust and some have not climbed all the way back.
Big picture: The U.S. housing market is in pretty good health. Sales keep rising and builders are busy as millennials enter their home-buying years. Low interest rates and the best jobs market in years have created a tailwind that’s fueling demand.
The supply of new and previously owned homes for sale, however, has not kept pace and that’s contributed to a sharp escalation in prices. Without more supply, some buyers could get frozen out.
Another potential drag in 2018 could be higher mortgage rates. The Federal Reserve raised a key interest rate in December that helps determine the cost of borrowing. The central bank could boost rates by up to another percentage point in the next 12 months, forecasts show.
Market Reaction: Stocks were mixed, with the Dow Jones Industrial Average gaining early Tuesday in light trading the day after Christmas but other indexes in the red.