Home prices in the 20 cities analyzed by the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index were flat on a year-over-year basis in June. On a month-over-month basis, the Index, which covers all nine U.S. Census divisions, was 0.9% higher compared with May.
“Today’s report shows what we know—demand is down due to higher rates, but supply is down even more,” says Zonda chief economist Ali Wolf. “With shoppers outpacing inventory, prices continue their march higher. While it seems prices can endlessly go higher and consumers will continue to show up, the recent uptick in mortgage rates poses a challenge for home sellers trying to figure out the best price for their home and home buyers trying to figure out what their limit is.”
June represented the fifth consecutive month in which home prices increased across the country. The National Composite has risen 4.7% year to date, which is slightly above the median full calendar year increase in the 35-year history of the data series.
“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,” says Craig Lazzara, managing director at S&P Dow Jones Indices.
The 10-City Composite Index decreased 0.5% on a year-over-year basis in June, an improvement from the 1.1% annual decline in May. The 20-City Composite Index posted a year-over-year loss of 1.2%, up from a loss of 1.7% in the previous month.
“Prices rose in all 20 cities in June, both before and after seasonal adjustment,” says Lazzara. “Over the last 12 months, 10 cities show positive returns. Otherwise said, half the cities in our sample now sit at all-time high prices.”
Chicago, Cleveland, and New York reported the highest year-over-year gains among the 20 cities in June. Chicago recorded a 4.2% year-over-year price increase, Cleveland reported a 4.1% increase, and New York experienced a 3.4% increase. According to the report, 13 cities showed price acceleration relative to the previous month.
“The worst performances continue to be in the Pacific and Mountain time zones, with San Francisco (-9.7%) and Seattle (-8.8%) at the bottom,” says Lazzara. “The Midwest (+2.8%) continues as the nation’s strongest region, followed this month by the Northeast (+1.6%). The West (-5.9%) remains the weakest region.”