The foot on the gas is letting up.
The explosive growth in home prices is slowing, according to the latest S&P CoreLogic/Case-Shiller Indices, which found July prices rose 6 percent year-over-year—an easing from 6.2 percent in June, and a March peak of 6.5 percent.
“Rising homes prices are beginning to catch up with housing,” says David M. Blitzer, chairman and managing director of the Index Committee at S&P Dow Jones Indices. “Year-over-year gains and monthly seasonally adjusted increases both slowed in July for the S&P CoreLogic Case-Shiller National Index, and the 10- and 20-City Composite indices.
“The slowing is widespread,” Blitzer says. “Fifteen of 20 cities saw smaller monthly increases in July 2018 than in July 2017. Sales of existing single-family homes have dropped each month for the last six months, and are now at the level of July 2016. Housing starts rose in August due to strong gains in multifamily construction. The index of housing affordability has worsened substantially since the start of the year.”
In July, existing-home sales slid 0.7 percent, according to the National Association of REALTORS® (NAR); in August, they evened out, with no gain or loss. In both months, ground-breaking increased.
The Case-Shiller 10-City Composite, which is an average of 10 metros (Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, D.C.), in July rose 5.5 percent year-over-year, a decrease from 6 percent in June. The 20-City Composite—which is an average of the 10 metros in the 10-City Composite, plus Atlanta, Charlotte, Cleveland, Dallas, Detroit, Minneapolis, Phoenix, Portland, Seattle and Tampa—rose 5.9 percent year-over-year, also a decrease, from 6.4 percent in June. Month-over-month, both the 10-City Composite and the 20-City Composite rose, 0.2 percent and 0.3 percent, respectively.
“Since home prices bottomed in 2012, 12 of the 20 cities tracked by the S&P CoreLogic/Case-Shiller Indices have reached new highs before adjusting for inflation. The eight that remain underwater include the four cities which led the home price boom: Las Vegas, Miami, Phoenix and Tampa. All are enjoying rising prices, especially Las Vegas, which currently has the largest year-over-year increases of all 20 cities. The other cities where prices are still not over their earlier peaks are Washington, D.C., Chicago, New York and Atlanta.”
The complete data for the 20 markets measured by S&P:
Month-Over-Month (MoM): 0.5%
Year-Over-Year (YoY): 5.8%
Las Vegas, Nev.
Los Angeles, Calif.
New York, N.Y.
San Diego, Calif.
San Francisco, Calif.