U.S. home prices increased 0.7% on an unadjusted basis in July compared with June and increased 4.7% compared with July 2014, according to the S&P/Case-Shiller home price index (HPI).
The index's 10-city composite increased 0.6% in July compared with June and increased 4.5% compared with July 2014.
The 20-city composite was also up 0.6% compared with June and was up 5.0% year over year.
On an adjusted basis, home prices nationally were up 0.4%, month over month, while the 10-city and 20-city composites were each down about 0.2%.
San Francisco, Denver and Dallas saw the most home price appreciation in July, with year-over-year increases of 10.4%, 10.3% and 8.7%, respectively.
Phoenix and Boston also set new records for home price growth, according to the report.
‘Prices of existing homes and housing overall are seeing strong growth and contributing to recent solid growth for the economy,’ says David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. ‘The [national index] has risen at a four percent or higher annual rate since September 2012 – well ahead of inflation.’
Blitzer notes that most of the growth in July was in states west of the Mississippi. For example, cities that saw the most growth since January 2000 were all in California: Los Angeles (138%), San Francisco (116%) and San Diego (115%).
‘The two smallest gains since January 2000 are Detroit at three percent and Cleveland at 10 percent,’ Blitzer says. ‘The Sunbelt cities – Miami, Tampa, Phoenix and Las Vegas – which were the poster children of the housing boom, have yet to make new all-time highs.’
Blitzer adds that the recent growth in home prices and home sales has helped boost the economy, which grew at a 3.9% real annual rate in the second quarter.
‘Residential investment grew at annual real rates of nine to 10 percent in the last three quarters – far faster than total [Gross Domestic Product (GDP)],’ he says, referring to the three quarters ended in the second quarter. ‘Further, expenditures on furniture and household equipment – a sector that depends on home sales and housing construction – also surpassed total GDP growth rates. Other positive indicators of current and expected future housing activity include gains in sales of new and existing housing and the National Association of Home Builders sentiment index.’
Blitzer continues to maintain his position that an ‘interest rate increase by the Federal Reserve, now expected in December by many analysts, is not likely to derail the strong housing performance.’
Yesterday, Black Knight Financial Services released its HPI report showing that home prices increased 0.4% in July compared with June and increased 5.3% compared with July 2014.
The average price for a single-family home in July was $253,000, which is about 5.5% below the June 2006 peak of $268,000 but up nearly 27% from the market's bottom, according to Black Knight.
Earlier this month, CoreLogic released its HPI showing that home prices increased 1.7% in July compared with June and increased 6.9% compared with July 2014.
Excluding distressed sales, home prices increased 1.5% month over month and 6.7% year over year, according to CoreLogic.