MortgageReal Estate

Case-Shiller says home-price gains have slowed to a near 7-year low

Phoenix reported the highest year-over-year gain among all of the 20 cities

In June, the nation’s home-price gains fell to the lowest level in nearly seven years, according to the latest Case-Shiller Home Price Index from S&P Down Jones Indices and CoreLogic. June 2019 saw an annual increase of 3.1% for home prices nationwide, falling from  the previous month's pace of 3.3%,  according to the report.

Before seasonal adjustment, the National Index increased 0.6% month over month in June. The 10-City Composite posted a 0.2% gain and the 20-City Composite increased 0.3% month over month.

After seasonal adjustment, the National Index recorded a month-over-month gain of 0.2% in June. However, both the 10-City Composite and the 20-City Composite did not post a month-over-month increase.

The 10-City and 20-City composites reported 1.8% and 2.1% year-over-year increase for the month, respectively. Before seasonal adjustment, 19 of 20 cities reported increases, while 17 of 20 cities reported increases after the seasonal adjustment.

“Home price gains continue to trend down but may be leveling off to a sustainable level,” S&P Dow Jones Indices Director and Global Head of Index Governance Philip Murphy said. “The average YOY gain declined to 3% in June, down from 3.1% the prior month. However, fewer cities experienced lower YOY price gains than in May.”

Phoenix, Las Vegas and Tampa unsurprisingly reported the highest year-over-year gains among all of the 20 cities, according to the report.

In May, Phoenix led with a 5.8% year-over-year price increase, followed by Las Vegas with a 5.5% increase and Tampa with a 4.7% increase. Six of the 20 cities reported larger price increases in the year ending June 2019 versus the year ending May 2019.

“The southwest (Phoenix and Las Vegas) remains the regional leader in home price gains, followed by the southeast (Tampa and Charlotte),” Murphy said. “With three of the bottom five cities (Seattle, San Francisco, and San Diego), much of the west coast is challenged to sustain YOY gains. For the second month in a row, however, only Seattle experienced outright decline with YOY price change of -1.3%.”

“The U.S. National Home Price NSA Index YOY price change in June 2019 of 3.1% is exactly half of what it was in June 2018,” Murphy said. “While housing has clearly cooled off from 2018, home price gains in in most cities remain positive in low single digits. Therefore, it is likely that current rates of change will generally be sustained barring an economic downturn.”

The graph below highlights the average home prices within the 10-City and 20-City Composites:

June: Case-Shiller

(Click to enlarge)

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