Home Prices Continue To Remain Elevated

Two data reports issued today reaffirmed that housing prices are showing no signs of weakening.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, remained unchanged in June from one year earlier and was up from an annual loss of -0.4% in May. The 10-City Composite showed a decrease of -0.5%, which is an improvement on the -1.1% decrease in the previous month, while the 20-City Composite posted a year-over-year loss of -1.2%, up from -1.7% in the previous month.

Before a seasonal adjustment, the U.S. National Index posted a 0.9% month-over-month increase in June, while the 10-City and 20-City Composites also posted like increases of 0.9%. After the seasonal adjustment, the U.S. National Index posted a month-over-month increase of 0.7%, while the 10-City and 20-City Composites both posted increases of 0.9%. Chicago, Cleveland, and New York City reported the highest year-over-year gains among the 20 cities in June with increases of 4.2%, 4.1%, and 3.4%, respectively.

“U.S. home prices continued to increase in June 2023,” said Craig J. Lazzara, managing director at S&P Dow Jones Indices. “Our National Composite rose by 0.9% in June, and it now stands only -0.02% below its all-time peak from exactly one year ago. Our 10- and 20-City Composites likewise each gained 0.9% in June 2023, and stand -0.5% and -1.2%, respectively, below their June 2022 peaks. As we’ve noted previously, the recovery in home prices is broadly based.  Prices rose in all 20 cities in June, both before and after seasonal adjustment. Over the last 12 months, 10 cities have shown positive returns. Otherwise said, half the cities in our sample now sit at all-time high prices.”

Lazzara added that June was the fifth consecutive month with increases in home prices, noting that during the first half of the year “the National Composite has risen 4.7%, which is slightly above the median full calendar year increase in more than 35 years of data. We recognize that the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, but the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

Separately, the Federal Housing Finance Agency (FHFA) reported home prices recorded a 3% year-over-year increase in the second quarter and were up by 1.7% from the first quarter. FHFA’s seasonally adjusted monthly index for June was up 0.3 percent from May.

Prices rose in 42 states between the second quarters of 2022 and 2023, most notably in Maine (7.6%), Connecticut (7.6%) and New Hampshire (7.1%), with the greatest annual depreciation occurring in Nevada (-5.3%), the District of Columbia (-4.9%) and Utah (-4.5%).

“U.S. house prices appreciated at a slightly higher rate in the second quarter amid low inventory,” said Dr. Anju Vajja, Principal Associate Director in FHFA’s Division of Research and Statistics. “While prices in a number of western states continued to decline year-over-year, house prices rose in all states quarter-over-quarter.”​