The recently released S&P CoreLogic Case Shiller Home Price Index indicated that national home prices increased +3.1% in June 2019. This increase is exactly -50% less than home price increases in June 2018 and down from+ 3.3% increases in May 2019.
In terms of CoreLogic’s 10-City Composite, home prices gained +1.8%, down from +2.2% gains in May 2019. CoreLogic’s 20-City Composite, home prices increased +2.1% annually, down from +2.4% annual home price increases in May 2019.
Highest gains in home prices were seen in the Southwest where Phoenix experienced a +5.8% YOY increase and Las Vegas experienced a +5.5% YOY increase. Tampa’s home prices increased +4.7% YOY and six of twenty cities reported greater home price gains in June 2019 than in May 2019.
Twelve cities experienced lower YOY gains than in June 2019. However, the big news is that only Seattle experienced a decrease in home prices on a YOY basis, down -1.8% compared to June 2018.
Philip Murphy, the managing director and global head of governance with the Index, said, “While housing has clearly cooled off from 2018, home price gains in most cities remain positive in lower single digits. Therefore, it is likely that current rates of change, now one full percentage point lower than one year ago, will generally be sustained barring an economic downturn.”
According to CoreLogic’s Ralph McLaughlin, “Despite the (home price) cool-down entering its 14th consecutive month. CoreLogic sees the cool-down flattening or even reversing course in the coming months…if mortgage rates stay low, wages continue to grow and inventory picks up, we can expect the US housing market to further stabilize throughout the remainder of the year.”
For another perspective on home price appreciation, the Federal Housing Finance Agency (FHFA) looked at homes backed by loans by Freddie Mac and Fannie Mae, to the exclusion of homes considered to be on the high end of the market, and determined that home prices in Q2 2019 increased +5% from one year ago.
Lynn Fisher, FHFA’s senior advisor for economics, agrees with Murphy that lower mortgage rates could well have a positive impact on home price appreciation. “We expect some positive effect of the mortgage interest rate decline on housing demand as well as home price appreciation…this should lead to a longer summer buying season and potentially a higher rate of appreciation on a seasonally adjusted basis than would have previously been expected in the third quarter.”
Thanks to CNBC’s Diana Ollick for source data.