Home prices have exhibited remarkable resilience, with a steady uptrend in August, according to two major indices released today. The Federal Housing Finance Agency (FHFA) and the S&P CoreLogic Case-Shiller Indices both echoed the strength of the housing market.
The FHFA seasonally-adjusted monthly House Price Index (HPI) indicated that home prices rose in August, up 0.6% from July when there was a previously reported price increase of 0.8% from June.
“U.S. and regional house price gains remained strong over the last 12 months,” said Dr. Nataliya Polkovnichenko, supervisory economist in FHFA’s Division of Research and Statistics. “The South Atlantic division showed moderate weakness in August, while the remaining census divisions posted positive price appreciation from the previous month.”
House prices rose 5.6% in August year over year, with seasonally-adjusted monthly price changes from July 2023 to August 2023 ranging from -0.2% in the South Atlantic division to 1.1% in the Pacific and East North Central divisions. The 12-month changes ranged from 2.4% in the Mountain division to 8.6% in the Middle Atlantic division.
“Although housing prices have increased significantly this year, climbing 5% from the early-year low, higher mortgage rates and seasonal trends will slow further monthly gains – with some possible declines in winter months,” said Selma Hepp, chief economist at CoreLogic. “Nevertheless, the year-to-date gains indicate that growth will pick up through the end of 2023 compared to last year’s slump during this time period.”
Hepp also noted the regional variation.
“There are still variations in the market as more affordable markets and those with strong population growth keep encountering pressure on home prices due to continuous lack of available homes for sale, particularly markets in New England and Midwest, while markets in the South and Southeast have experienced more moderate home price growth recently, following years of rapid increases,” said Hepp.
Meanwhile, the S&P CoreLogic Case-Shiller Indices gave further credence to the robustness of the U.S. housing sector. Data revealed that 13 out of 20 major metropolitan areas experienced month-over-month price escalations in August. The National Home Price Index, encompassing all nine U.S. census divisions, exhibited a 2.6% annual increment in August, marking a significant jump from the previous month's 1.0%. The 10-City and 20-City composites showcased increased momentum, registering gains of 3.0% and 2.2%, respectively.
Chicago maintained its prime position, witnessing the steepest year-over-year augmentation among the 20 cities for the fourth successive month. In a testament to the overall bullish sentiment, 19 out of 20 cities displayed an accelerating year-over-year price trend relative to the preceding month.
Since the mid-1970s, the FHFA HPI has measured changes in single-family home values based on data from all 50 states and more than 400 American cities. The S&P CoreLogic Case-Shiller index covers major metropolitan areas, which are also aggregated to form two composites – one comprising 10 of the metro areas, the other comprising all 20.
(Associate Editor Erica Drzewiecki contributed to this article.)
