Home Prices Decelerate at Largest Pace in History in July says S&P CoreLogic Case-Shiller

US home prices increased 15.8% in the year that ended in July, down from an 18.1% annual rate the prior month according to the CoreLogic Case-Shiller 20-city home price index. The index fell 0.3% in July from June, the first month-over-month decline since January 2019. Existing-home sales have fallen for seven straight months through August as a rapid increase in mortgage rates since the start of the year has made homeownership far less affordable. The National Composite Index -2.3% difference between those June and July two monthly rates of gain is the largest deceleration in the history of the index.

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Homes usually go under contract a month or two before they close, as such the July data reflects purchase decisions made earlier in the year, when interest rates weren’t as high as they are now. The Federal Reserve continues to raise interest rates making mortgage financing more expensive. The average rate on a 30-year fixed-rate mortgage was 6.29% in the week ended Sept. 22, up from 2.88% from a year earlier, according to housing-finance agency Freddie Mac.

 “Although U.S. housing prices remain substantially above their year-ago levels, July’s report reflects a
forceful deceleration,” says Craig J. Lazzara, Managing Director at S&P DJI.

“For example, while the National Composite Index rose by 15.8% in the 12 months ended July 2022, its year-over-year price rise in June was 18.1%. The -2.3% difference between those two monthly rates of gain is the largest deceleration in the history of the index.

We saw similar patterns in our 10-City Composite (up 14.9% in July vs. 17.4% in June) and our 20-City Composite (up 16.1% in July vs. 18.7% in June). On a month over month basis, all three composites declined in July

  • The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 15.8% annual gain in July, down from 18.1% in the previous month.
  • The Case-Shiller 10-city index gained 14.9% over the year ended in July, compared with a 17.4% increase in June.
  • The 20-city index rose 16.1%, after an annual gain of 18.7% in June. Price growth decelerated in all of the 20 cities.
  • Before seasonal adjustment, the U.S. National Index posted a -0.3% month-over-month decrease in
  • July, while the 10-City and 20-City Composites both posted decreases of -0.8%.
  • After seasonal adjustment, the U.S. National Index posted a month-over-month decrease of -0.2%, and the 10-City and 20-City Composites posted decreases of -0.5% and -0.4%, respectively.
  • In July, only 7 cities reported increases before and after seasonal adjustments.
  • A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found a 13.9% increase in home prices in July from a year earlier.
  • The FHFA House Price Index fell 0.1% in July after increasing a revised +0.1% in June
United States S&P Case-Shiller Home Price Index

Tampa, Miami, and Dallas reported the highest year-over-year gains among the 20 cities in July. Tampa led the way with a 31.8% year-over-year price increase, followed by Miami in second with a 31.7% increase, and Dallas in third with a 24.7% increase.

  • Prices in Tampa (31.8%),
  • Miami (31.7%),
  • Dallas (24.7%) rose the most
  • Minneapolis (9%),
  • Washington (9.4%),
  • San Francisco (10.8%) recorded the smallest increases.

All 20 cities reported lower price increases in the year ending July 2022 versus the year ending June 2022.

The deceleration in U.S. housing prices that we began to observe several months ago continued in
July 2022.

“As the Federal Reserve continues to move interest rates upward, mortgage financing has become
more expensive, a process that continues to this day. Given the prospects for a more challenging
macroeconomic environment, home prices may well continue to decelerate.”

Source: S&P CoreLogic Case-Shiller

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