Home prices jumped up +3.2% in August 2019 from +3.1% in July 2019, according to the latest S&P CoreLogic Case Shilling National Home Price Index.
Prices in the 10-City Index came in at +1.5%, down from +1.6% in July 2019. Prices in the 20-City Index came in at 2% higher, steady with prices in July 2019. This is the first year/year increase in the rate of home price growth since March 2018.
Eleven of the 20-City Index metros reported lower price increases In August than in July of 2019 and sever of the 20 reported greater price increases. The top price gainers were…
- Phoenix – +6.3%
- Charlotte – +4.5%
- Tampa – +4.3%
- Atlanta – +4.0%
Las Vegas fell from the number two position it held in July to number eight in August with home price gains of +3.3% in August 2019.
Seattle switched its position from negative annual price changes for three consecutive months to +0.7% positive price changes in August. And San Francisco, for the first time since 2012, stood as the only city with negative price changes of -0.1%.
Ralph McLaughlin, the deputy chief economist with CoreLogic, said, “This month’s report brought us the first sign that lower mortgage rates may be prolonging a housing market explosion that might otherwise be in its waning months…when housing is more expensive, such as is today’s market, rapidly falling mortgage rates allow buyers on the sidelines to qualify for a mortgage, thus boosting short-run demand and allowing price growth to turn upwards again.”
Homeownership rates turned upwards long with price growth as well. According to the latest US Census Bureau’s Housing Vacancies and Homeownership report, homeownership jumped to 64.8% in Q3 2019, up +0.4% from Q2 2019.
This homeownership rate was driven by strong owner household growth and a decrease in renter households. Additionally, strong owner demand combined with low inventory helped drive homeowner vacancy rates to lows not seen since early 2000’s.
Approximately 1.4M new owner-occupiers emerged in Q3 2019. The number of new renter households dropped by some -33,000.
Not only did low mortgage rates entice some renters to become homeowners, this healthy demand for homeownership uncovered the consequence of underbuilding during this economic cycle.
Thanks to CNBC’s Diana Olick and CoreLogic’s Ralph McLaughlin for source data.