U.S. home price appreciation continued to slow in August, as shown by the S&P CoreLogic Case-Shiller home price index report.
Month-over-month, home prices increased 0.6%, on an adjusted basis, in August compared with July.
However, the 10-city and 20-city composites were flat compared with the previous month.
Before seasonal adjustment, home prices increased 0.2% compared with July. The 10-city and 20-city composites both posted 0.1% month-over-month increases.
Year-over-year, home prices increased 5.8% in August, down from 6.0% in the previous month.
The 10-city composite increased 5.1%, compared tie a year earlier, down from 5.5% the previous month.
The 20-city composite posted a 5.5% year-over-year gain, down from 5.9% the previous month.
Las Vegas, San Francisco and Seattle reported the highest year-over-year gains among the 20 cities.
In August, Las Vegas led the way with a 13.9% year-over-year price increase, followed by San Francisco with a 10.6% increase and Seattle with a 9.6% increase.
Four of the 20 cities reported greater price increases in the year ended August versus the year ended July.
In August, 12 of 20 cities reported increases before seasonal adjustment, while 17 of 20 cities reported increases after seasonal adjustment.
“Following reports that home sales are flat to down, price gains are beginning to moderate,” says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a statement. “Comparing prices to their levels a year earlier, 14 of the 20 cities, the national index plus the 10-city and 20-city composite Indices all show slower price growth.
“The seasonally adjusted monthly data show that 10 cities experienced declining prices,” Blitzer says. “Other housing data tell a similar story: prices and sales of new single family homes are weakening, housing starts are mixed and residential fixed investment is down in the last three quarters.”
Blitzer says rising home prices combined with rising mortgage rates are discouraging many would-be buyers from looking.
“There are no signs that the current weakness will become a repeat of the crisis, however,” he adds. “In 2006, when home prices peaked and then tumbled, mortgage default rates bottomed out and started a three year surge. Today, the mortgage default rates reported by the S&P/Experian Consumer Credit Default Indices are stable.
“Without a collapse in housing finance like the one seen 12 years ago, a crash in home prices is unlikely.”