Housing

July Home Price Increases Continue Slowing

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The S&P CoreLogic Case-Shiller national home price index rose 6% year over year in July to a non-seasonally adjusted (NSA) index of 205.35. That’s 0.2 percentage points lower than the month-over-month increase posted in June.

In all U.S. cities included in the 20-city home price index, July house prices increased year-over-year, and all 20 also posted NSA month-over-month increases. Las Vegas (13.7%), Seattle (12.1%) and San Francisco (10.8%) posted the largest year-over-year gains. Las Vegas and Cleveland (1.4%) posted the largest month-over-month increase, followed by Phoenix (0.7%) and San Francisco and Tampa (0.6%).

The S&P CoreLogic Case-Shiller NSA home price indexes for July increased by 5.9% year over year for the 20-city composite index and by 5.5% for the 10-city composite index. Economists had estimated an NSA year-over-year gain in the 20-city index of 6.3%.

The Case-Shiller index tracks prices on a three-month rolling average. July represents the three-month average of May, June and July prices.

Average home prices for July remain comparable to their levels in the winter of 2007.

The S&P index committee chair, David M. Blitzer, said:

Rising homes prices are beginning to catch up with housing. Year-over-year gains and monthly seasonally adjusted increases both slowed in July for the S&P Corelogic Case-Shiller National Index and the 10 and 20-City Composite indices. The slowing is widespread: 15 of 20 cities saw smaller monthly increases in July 2018 than in July 2017. Sales of existing single family homes have dropped each month for the last six months and are now at the level of July 2016. Housing starts rose in August due to strong gains in multifamily construction. The index of housing affordability has worsened substantially since the start of the year.

Since home prices bottomed in 2012, 12 of the 20 cities tracked by the S&P Corelogic Case-Shiller indices have reached new highs before adjusting for inflation. The eight that remain underwater include the four cities which led the home price boom: Las Vegas, Miami, Phoenix and Tampa. All are enjoying rising prices, especially Las Vegas which currently has the largest year-over-year increases of all 20 cities. The other cities where prices are still not over their earlier peaks are Washington DC, Chicago, New York and Atlanta.

Compared to their peak in the summer of 2006, home prices are now 0.3% higher on the 10-city index. On the 20-city index, home prices are now 3.5% higher. Since the low of March 2012, home prices are up 55.0% and 59.4% on the 10-city and 20-city indexes, respectively. On the national index, home prices are now 11.2% above the July 2006 peak and 53.2% higher than their low-point in February 2012.

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