Slowly But Surely, Home Prices Keep Rising
Home prices continued to post year-over-year gains in the latest data from the S&P CoreLogic Case-Shiller Indices, albeit at an increasingly slower pace.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 3.2 percent annual gain in July, unchanged from June. The 10-City Composite recorded a 1.6 percent annual increase, down from 1.9 percent in the previous month, while the 20-City Composite’s two percent year-over-year gain was lower than the 2.2 percent gain in the previous month.
Before factoring in the seasonal adjustment, the National Index posted a month-over-month increase of 0.4 percent in July while the 10-City Composite was unchanged from June and the 20-City Composite inched up by 0.1 percent increase for the month. After the seasonal adjustment, the National Index recorded a 0.1 percent month-over-month increase in July while the 10-City Composite posted a 0.1 percent drop and the 20-City Composite did not report any gains. In July, 15 of 20 cities reported increases both before and after the seasonal adjustment.
“Year-over-year home prices continued to gain, but at ever more modest rates,” said Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices. “Charlotte surpassed Tampa to join the top three cities, and Seattle may be turning around from its recent negative streak of year-over-year price changes, improving from -1.3 percent in June to -0.06 percent in July. Overall, leadership remains in the southwest (Phoenix and Las Vegas) and southeast (Charlotte and Tampa). Other pockets of relative strength include Minneapolis, which increased its year-over-year gain to 4.2 percent, and Detroit, which is closely behind at 4.1 percent year-over-year.”
Tian Liu, chief economist at Genworth Mortgage Insurance, said: "Growth in home prices, as measured by the Case-Shiller Home Price Index, is beginning to stabilize in July. The more than 100 basis point decrease in mortgage rates since November has had a significant impact on the housing market by boosting purchasing power of buyers and reviving home sales. That extra purchasing power has already reduced inventory in the national housing market. Historically, tighter supply has been a good indicator of determining the direction of home price growth.”
Separately, the Federal Housing Finance Agency (FHFA) reported home prices rose in July by 0.4 percent from June and by five percent from July 2018. For the nine Census divisions, seasonally adjusted monthly house price changes from June to July ranged from a 0.1 percent uptick in the Middle Atlantic division to a 1.2 percent gain in the Mountain division. The 12-month changes were all positive, ranging from 3.6 percent in the Middle Atlantic division to 7.6 percent in the Mountain division.