The S&P CoreLogic Case-Shiller U.S. National Home Price Index rose 3.2% annually in July after a 3.2% rise also seen in June. Despite the steady growth in the overall index, home prices are still undergoing a slowdown in major cities.
Key Takeaways
- The Case-Shiller index reported 3.2% growth in July after the same growth was reported the month before.
- The 10-city composite rose by 1.6% annually, down 1.9% in June.
- The 20-city composite grew 2%, down from 2.2% in June.
Out of all the cities included in the index, Seattle was the only one to show price decline on an annual basis with -0.6% growth compared to July 2018. San Francisco, New York, and Los Angeles were not far off at near-negative readings. Home prices have been cooling down since March 2018, although it’s possible that prices are seeing increased upward momentum due to the monetary easing policies introduced by the US central bank.
Home price growth was the highest in Phoenix, Las Vegas, and Charlotte. Phoenix prices grew 5.8% annually, Las Vegas prices rose 4.7%, and Charlotte prices grew by 4.6%. 7 out of the 20 reported cities saw an increase in price growth when comparing the year ending July 2019 to the year ending June 2019, and prices are still cooling in the largest cities.
Case-Shiller: National House Price Index increased 3.2% year-over-year in Julyhttps://t.co/XjEaPmjUTp pic.twitter.com/7X8s286jB6
— Bill McBride (@calculatedrisk) September 24, 2019
Growth was strongest in the southwest and southeast, although Minneapolis and Detroit also saw major annual gains of 4.2% and 4.1% respectively. Rising mortgage rates made housing less affordable throughout 2018, most likely putting pressure on prices. However, rates began to drop at the beginning of 2019, increasing purchasing power of potential buyers and bringing more new entrants to the market.
Expert Outlook
“Home price gains remained positive in low single digits in most cities, and other fundamentals indicate renewed housing demand,” said Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices. “According to the National Association of Realtors, the YOY change in existing home sales was positive in July for the first time in a number of months, and housing supply tightened since peaking in June.”
Market Reaction
Gold prices faced selling pressure earlier in the day but have since rebounded. Spot gold last traded at $1,527.99/oz, up 0.28% with a low of $1,516.74/oz.
Gold Price Chart
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