Home Prices in This City Soared 30%

By Douglas A. McIntyre Published Sep 28, 10:45AM EDT

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Home Prices in This City Soared 30% — © adogslifephoto / iStock via Getty Images

The S&P CoreLogic Case-Shiller Indices are released each month. They are the gold standard for measuring U.S. home prices. July, the latest month reported, showed a national home price increase of 19.7% over the same month last year, a record in the 27 years that the study has been in existence.
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CoreLogic Deputy Chief Economist Selma Hepp commented:

Homebuyers across all ages continue to enjoy historically low mortgage rates, but have now also been joined by an influx of investor buyers over the summer. This continued high buyer demand has even outstripped the improvements in the supply of for-sale homes from the all-time lows experienced in the spring.

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Fundamentally, this means many of the triggers for rising home rates this year remain unchanged. Mortgage rates have not risen (although government bond rates and inflation have). Incomes for Americans in the middle and upper classes were rarely hurt by the pandemic recession. The value of the assets held by many people has grown because of the stock market and improved home equity numbers. People continue to move from big coastal cities to ones inland with lower costs of living. The so-called work-from-home economy has allowed this.

The Case-Shiller figures by city show the surge in prices in the tier of cities below New York, Los Angeles and San Francisco. The authors wrote: “Phoenix led the way with a 32.4% year-over-year price increase, followed by San Diego with a 27.8% increase and Seattle with a 25.5% increase.”

The question going forward is whether this level of increase can continue. Several headwinds have already begun. Inflation may cause the Federal Reserve to increase rates, which eventually will spill over into the mortgage market. Builders, driven by high home prices and potential profits, will add inventory, which should push up supply to a tight market. The thousands of people who are relocating or plan to will start to dwindle.

Finally, a new slowdown in the economy, likely driven in part by another wave of COVID-19 infections, will affect how much people can pay for a new home.
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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.