The CoreLogic S&P Case-Shiller Index, which tracks home price growth throughout the U.S., gained further momentum in August by increasing 2.6% year over year.
It’s the second straight month with an annualized increase for the national index, continuing the home price bounce back after two months of yearly declines. Home prices are now exceeding their peak in June 2022 by 0.4% and are up 6.4% from their trough in January 2023.
On a more short-term basis, price gains continue to pick up speed, noted Craig J. Lazzara, managing director at S&P DJI.
“Our national composite rose by 0.4% in August, which marks the seventh consecutive monthly gain since prices bottomed in January 2023,” he said. “The composite now stands 2.6% above its year-ago level and 6.4% above its January level. Our 10- and 20-city composites each also rose in August, and likewise currently exceed their year-ago and January levels.”
On a year-over-year basis, the 10- and 20-city composites, which gauge home prices in some of the nation’s largest metro areas, were up 3% and 2.2%, respectively. Both gained steam compared to the annualized increases in July.
At 5%, Chicago had the largest yearly increase in home prices among the 20 cities tracked by CoreLogic, followed by New York (5%), Detroit (4.8%) and San Diego (4.1%). Notably, 19 of the 20 metros saw acceleration in their annualized home price gains compared to July. Cleveland was the lone exception, although the Ohio city’s year-over-year uptick in August was still fifth among tracked cities. On a monthly basis, Miami and New York logged the largest increases at 1.2% and 1.1%, respectively.
National prices, as well as those in many of the metros tracked by CoreLogic, have now surpassed their previous high points.
“One measure of the strength of the housing market is the relationship of current prices to their historical levels,” Lazzara said. “On that dimension, it’s worth noting that the national composite, the 10-city composite, and seven individual cities (Atlanta, Boston, Charlotte, Chicago, Detroit, Miami and New York) stand at their all-time highs. Observing the breadth of price changes provides insight into another dimension of market health.”
While price gains may be set to keep accelerating in the very near term, major headwinds ahead are set to blunt their upward trajectory as the year winds down, said Selma Hepp, chief economist at CoreLogic.
“Although housing prices have increased significantly this year, climbing 5% from the early-year low, higher mortgage rates and seasonal trends will slow further monthly gains – with some possible declines in winter months,” Hepp said. “Nevertheless, the year-to-date gains indicate that growth will pick up through the end of 2023 compared to last year’s slump during this time period.”