U.S. home prices continued their upward march in June, rising 0.2% on an adjusted basis compared with July, however the rate of appreciation is clearly slowing, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
The index’s 20-city and 10-city composites reported monthly increases of 0.4% and 0.5%, respectively.
Year-over-year, home prices – which are now at an all-time high – were up 5.4%. The 10-city composite saw an annual increase of 7.4%, down from a 7.8% annual increase in the previous month, while the 20-city composite posted a year-over-year increase of 6.5%, dropping from a 6.9% increase in the previous month.
New York reported the highest annual gain among the 20 cities with a 9.0% increase in June, followed by San Diego and Las Vegas with annual increases of 8.7% and 8.5%, respectively.
Portland once again held the lowest rank for the smallest year-over-year growth, notching a 0.8% annual increase in June.
“The S&P CoreLogic Case-Shiller Indices continue to show above-trend real price performance when accounting for inflation,” says Brian D. Luke, CFA, head of commodities, real and digital assets, in a statement. “Home prices and inflation continue to factor into the political agenda coming into the election season. While both housing and inflation have slowed, the gap between the two is larger than historical norms, with our National Index averaging 2.8 percent more than the Consumer Price Index. That is a full percentage point above the 50-year average. Before accounting for inflation, home prices have risen over 1,100 percent since 1974, but have slightly more than doubled (111 percent) after accounting for inflation.”
“Another popular theme is making housing more affordable to first-time homebuyers,” Luke adds. “We compared each of the 16 markets that the S&P CoreLogic Case-Shiller Home Price Indices calculate on a tiered basis to evaluate historical performance of more affordable homes. Our tiered indices divide each market into three price tiers, which range based on the market. Looking at the last five years, 75 percent of the markets covered show low-price tiers rising faster than the overall market.”
“For example, the lower tier of the Atlanta market has risen 18 percent faster than the middle- and higher-tiered homes,” he continues. “New York’s low tier has the largest five-year outperformance, rising nearly 20 percent above the overall New York region. New York also has the largest divergence between low- and high-tier prices. New York’s high-tier homes have lagged the region’s market by 5.1 percent. Conversely, San Diego has seen the largest appreciation in higher-tier homes over the past five years. While the overall San Diego market has risen by 72 percent in the past five years, the high tiers have done even better, rising 79 percent versus 63 percent for the lower tier.”
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