Key Highlights
- Home prices increased +4.8% in July after June’s +4.6% increase, according to Case-Shiller Index
- 10-City Composite annual increase +3.3%, up from +2.8% in June
- 20-City Composite up +3.9% annually after June’s increase of 3.5%
According to the latest S&P CoreLogic Case-Shiller US National Home Price Index, home values nation-wide rose +4.8% annually in July, up from a +4.3% increase in June. Its 10-City Composite indicated a +3.3% annual gain in July, up from +2.8% in June. Its 20-City Composite increased +3.9% annually in July, up from +3.5% in June.
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Know that this index is a three-month running average that includes prices from May, June and July. More recent data indicates that prices continued to strengthen even more so in August.
According to Craig Lazzara, managing director and global head of Index Investment Strategy with S&P Dow Jones Indices, said, “In previous months, we’ve noted that a trend of accelerating increases in the National Composite Index began in August 2019. That trend was interrupted in May and June, as price gains decelerated modestly, but now may have resumed.”
“Weekly home price data show that sellers are raising asking prices at a double-digit pace, and surprisingly, eager buyers are willing to give them what they’re looking for,” said Danielle Hale, chief economist with realtor.com. “Looking forward, we saw asking prices rise by double digits in August so we expect to see another big jump in next month’s release.”
(Know that record low mortgage interest rates have given buyers more purchasing power and that increased purchasing power is fueling bigger and bigger home price gains.)
Selma Hepp, deputy chief economist with CoreLogic, also weighed in on this recent data. “The US housing market has been caught up in a ‘perfect storm’ during the COVID-19 pandemic. The substantial swing in demand is driven by a need for indoor and outdoor space met by record low mortgage rates and a wave of Millennials who were on the verge of buying – all competing for fewer and fewer homes on the market.”
Hepp continued. “…traditional first-time buyers sought refuge (from the pandemic) in larger square footage and outdoor spaces and buyers who had not been financially impacted by the pandemic sought second homes in resort, beach and mountain areas. Demand will likely keep home price growth strong over the coming months. And, continued price growth will help insulate homeowners’ equity position, which will be particularly helpful to owners who have been financially impacted by the pandemic and opted for a forbearance program. Those homeowners may be able to sell a home without going through a short sale or a foreclosure.”
Phoenix, Seattle and Charlotte logged the highest annual gains among all the cities analyzed in this research. Phoenix had home price increases of +9.2%, Seattle with +7% increases and Charlotte with a +6% increase. Prices were particularly strong in the Southeast and West regions of the country and comparatively weak in the Midwest and Northeast. New York City and Chicago logged the lowest annual gains.
Thanks to CNBC, CoreLogic, S&P Case-Shiller US National Home Price Index, MortgageNews and realtor.com.
Also read: Affordability Improves for 1st Time in 16 Months, 10 Cities Could See Tough Housing Market in Near Future, Median Home Prices Up in 96% of Metros in Q2 2020
