24/7 Wall St. Insights
- The carefully followed S&P Case-Shiller index, which covers housing prices each month, showed that these rose again in July.
- However, Detroit remains the cheapest housing market in America.
- Also: Two dividend legends to hold forever.
How cheap or expensive a housing market can be measured in several ways. One of the most carefully watched research reports about home prices by major metropolitan area is the S&P Case-Shiller Indexes. They are released monthly and monitor the increase in home prices in 20 cities over time.
Home prices rose 5% in July compared to the year before. Increases have become a trend over the past several months. “Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index,” says Brian D. Luke, CFA, Head of Commodities, Real & Digital Assets. Case-Shiller researchers do not comment much on why the trend is so strong. One reason is probably a low inventory level nationally due to people staying in homes with low mortgage rates because the Federal Reserve kept interest rates near historic lows to boost the economy. Some of these people have 30-year fixed mortgages with a rate of under 3%.
Case-Shiller also examined home prices in the top 20 markets over a period that began in January 2000. Each city received an index of 100 at that time. In the cities where prices have grown rapidly, the number has risen to 300 or more over the past 24 years. In cities where prices rose very little in that time, the number is under 200.
Detroit is the city where home prices have risen the least as of July. Its index, based on its increase from January 2000, is 191.19. Cleveland is a close second at 195.71.
Case-Shiller does not explain why some markets have cheaper homes than others. However, Detroit’s 31.9% poverty rate, according to Census Bureau data, is likely one reason.
You Can Buy Most Homes in These 23 Cities for Under $125,000
Cash Back Credit Cards Have Never Been This Good
Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
