
Thirteen of the 20 major metropolitan markets reported month-over-month price increases in August, according to data from the S&P CoreLogic Case-Shiller Indices.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. Census divisions, reported a 2.6% annual change in August, up from a 1% change in the previous month.
“Home prices are a function of supply and demand. The demand pool is smaller due to higher mortgage rates, but the supply of homes to buy is even smaller,” says Ali Wolf, chief economist at Zonda. “The resulting impact is that home prices have gone up this year, despite rising interest rates. We are tracking to see how long this upward pressure lasts, however.”
The 10-City Composite showed an increase of 3%, while the 20-City Composite posted a year-over-year increase of 2.2%.
Out of the 20 cities included in the report, Chicago led the way for the fourth consecutive month, reporting the highest year-over-year gain in August. For the month, seven of 20 cities reported lower prices. Twelve of the 20 cities reported higher prices in the year ending August 2023 versus the year ending July 2023. Nineteen of the 20 cities showed a positive trend in year-over-year price acceleration compared with the prior month.
“Regional differences are substantial. On a year-over-year basis, the three best-performing metropolitan areas in August were Chicago (+5%), New York (+4.98%), and Detroit (+4.8%)," says Craig J. Lazzara, managing director at S&P Dow Jones Indices. "The bottom of the rankings still has a western focus, with the worst performances coming from Las Vegas (-4.9%) and Phoenix (-3.9%). The Midwest (+3.9%) continues as the nation’s strongest region, followed by the Northeast (+3.8%). The West (-0.9%) and Southwest (-0.8%) remain the weakest regions."
Before seasonal adjustment, the U.S. National Index, 10-City, and 20-City Composites, all posted a 0.4% month-over-month increase in August. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 0.9%, while the 10-City and 20-City Composites posted a 1% increase each.
“On a year-to-date basis, the National Composite has risen 5.8%, which is well above the median full calendar year increase in more than 35 years of data,” adds Lazzara. “The year’s increase in mortgage rates has surely suppressed housing demand, but after years of very low rates, it seems to have suppressed supply even more. Unless higher rates or other events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”