Too Soon to Tell Whether Price-Gain Deceleration Was Fleeting

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Newly released July 2020 data from the S&P CoreLogic Case-Shiller Indices show that home prices continued to increase at a modest rate across the U.S., with the U.S. National Home Price NSA Index reporting a 4.8% annual gain in July, up from 4.3% in the previous month.

“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,” explains Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.

“Obviously, more data will be required before we can say with confidence that any COVID-related deceleration is behind us,” he adds.

The 10-City Composite annual increase came in at 3.3%, up from 2.8% in the previous month, while the 20-City Composite posted a 3.9% year-over-year gain, up from 3.5% in the previous month.

Phoenix, Seattle and Charlotte reported the highest year-over-year gains among the 19 cities (excluding Detroit, whose data was not available) in July. Phoenix led the way, with a 9.2% year-over-year price increase, followed by Seattle (a 7.0% increase) and Charlotte (a 6.0% increase). Sixteen of the 19 cities reported higher price increases in the year ending July 2020 versus the year ending June 2020.

The National Index posted a 0.8% month-over-month increase, while the 10-City and 20-City Composites both posted increases of 0.6% before seasonal adjustment in July. After seasonal adjustment, the National Index posted a month-over-month increase of 0.4%, while the 10-City and 20-City Composites posted increases of 0.5% and 0.6%, respectively.

In July, 18 of 19 cities (excluding Detroit) reported increases before seasonal adjustment, while 18 of the 19 cities reported increases after seasonal adjustment.

“Phoenix’s 9.2% increase topped the league table for July; this is the 14th consecutive month in which Phoenix home prices rose more than those of any other city,” Lazzara notes. “Seattle, Charlotte and Tampa continue to occupy the next three places, but there was some growth even in the worst performing cities: Chicago (0.8%) and New York (1.3%). Prices were particularly strong in the Southeast and West regions, and comparatively weak in the Midwest and Northeast.”

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