According to the S&P CoreLogic Case-Shiller Indices data, US home prices increased by 1% in July compared to the previous year. The index, which covers all nine US census divisions and measures repeat-sales data, also showed a 0.6% increase in July on a seasonally adjusted basis. Craig J. Lazzara, managing director at S&P DJI, noted that home prices had previously peaked in June 2022 and declined by 5% through January 2023. However, the increase in prices since January has now surpassed the earlier decline, resulting in a new all-time high for the National Composite in July.
The rise in home prices can be attributed to several factors. Mortgage rates above 7% have impacted homebuyer affordability, and typically, home prices would fall in response to higher interest rates. However, this has not been the case recently. Additionally, a shortage of available homes for sale has contributed to the tight market and higher prices.
Among the cities measured in the data, Chicago experienced the steepest annual price growth at 4.4%, followed by Cleveland at 4%. In contrast, Las Vegas saw a decline of 7.2% in home prices compared to the previous year.
Lazzara emphasized that the recovery in home prices is widespread, with 10 out of the 20 cities in the sample reaching all-time high levels. In July, prices rose in all 20 cities after seasonal adjustment.
Year-to-date, the National Composite has seen a 5.3% increase, which is higher than the median full-calendar year increase observed in over three decades of data.
Separate data from the Census Bureau showed that sales for new single-family houses in August were slightly lower than the revised July reading but higher than the August 2022 estimate. The National Association of Realtors also reported a 3.9% increase in the median existing-home sale price compared to August 2022.
Overall, the housing market in the US continues to experience price growth, with the recovery in home prices being widespread across different cities. Factors such as mortgage rates and inventory shortages have contributed to the ongoing increase in prices.