Slowing Pace of Home Price Appreciation is ‘Widespread’

U.S. home prices continued to rise in July, however, the pace of appreciation is slowing, according to the S&P CoreLogic Case-Shiller home price index.

The report shows that home prices increased 0.2% on an adjusted basis in July compared with June and were up 6.0% compared with July 2017.

Month-over-month, the 10-city composite – measuring home prices in the 10 largest U.S. metropolitan markets – remained flat while the 20-city composite posted a 0.1% increase.

Year-over-year, the 10-city composite saw a 5.5% increase (down from 6.0% the previous month) while 20-city composite posted a 5.9% year-over-year gain (down from 6.4% the previous month).

Before seasonal adjustment, the national index posted a gain of 0.4% compared with June. The 10-city and 20-city composites reported increases of 0.2% and 0.3%, respectively.

Las Vegas, Seattle and San Francisco continued to report the highest year-over-year gains among the 20 cities.

In July, Las Vegas led the way with a 13.7% year-over-year price increase, followed by Seattle with a 12.1% increase and San Francisco with a 10.8% increase.

Five of the 20 cities reported greater price increases in the year ending July 2018 versus the year ending June 2018.

In a statement, David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, says the slowing of home price appreciation “is widespread – 15 of 20 cities saw smaller monthly increases in July 2018 than in July 2017.”

“Sales of existing single family homes have dropped each month for the last six months and are now at the level of July 2016,” he says. “Housing starts rose in August due to strong gains in multifamily construction. The index of housing affordability has worsened substantially since the start of the year.”

Although cities in the West have hot new peaks in terms of home prices in the past year, some cities – such as Las Vegas, Miami, Phoenix and Tampa – have not completely recovered in comparison to the pre-crisis yeas. Yet, as the report shows, these cities have also seen the sharpest increases in home prices in recent years.

Other cities where prices are still not over their earlier peaks are Washington DC, Chicago, New York and Detroit.

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