August saw an unusually hefty bump in home prices, marking the fourth straight month with a new record peak, according to the newest ICE Mortgage Monitor Report from Black Knight.
On a seasonally adjusted basis, home prices rose 0.68% from July to August — a gain that Black Knight described as “exceptionally strong.” Likewise, the non-seasonally adjusted monthly gain in August was 0.24%, more than 60% higher than the August average for the past 25 years.
National home prices, on a seasonally adjusted basis, are now 2.5% above their 2022 high-water mark. Two-thirds of major markets have reached their previous peaks, while nearly half of major markets saw July-to-August increases of at least 0.75%.
More gains are projected to be on the way, according to Andy Walden, vice president of enterprise research strategy at Intercontinental Exchange (which formally acquired Black Knight last month).
“After essentially flattening earlier this year, year-over-year home price growth has been reaccelerating for the last few months. … August marked the second consecutive month in which annual [home price appreciation] trended higher in every one of the 50 largest U.S. markets, mirroring the sharp reacceleration we’re seeing at the national level,” Walden reported.
“Already baked-in price gains mean further acceleration may be on the horizon. If adjusted home prices were to freeze where they are now, it would result in annual [home price appreciation] rising above 5% by year’s end, given the strong price increases seen earlier this year.”
So far this year, prices have increased by an average of 0.64% per month on a seasonally adjusted basis. If that trend were to continue, year-over-year growth would be at nearly 8% by December.
“All that said, closed sales from August would have typically gone under contract in July, when mortgage rates were 40 to 50 bps lower than today,” Walden said. “As it stands, home affordability hit yet another 38-year low in September by way of spiking rates and prices, both of which could still serve to cool price gains as we move toward the end of the year.”
