The surge in single-family home prices held firm in August, but experts indicate that signs of the feverish rate is slowing.
The most recent S&P CoreLogic/Case-Shiller Indices showed double-digit price gains in August, marking the fifth consecutive month of the activity. Home prices climbed by 19.8% in August, maintaining the same rate as the month before.
All 20 cities saw monthly price increases, but at a lower rate from the month prior. The 10-City Composite recorded an 18.6% gain—down from 19.2% in July. The 20-City Composite showed similar behavior with a 19.7% price gain compared with July’s 20%.
Despite the moderation of prices, experts note that each city and composite indices stand at their all-time high.
Tampa found its way into the top spots on the price gain list—usurping Seattle in the process. Phoenix, San Diego and Tampa recorded 33.3%, 26.2% and 25.9% gains, respectively.
The complete data for the 20 markets measured by S&P:
Atlanta, Ga.
August/July: 1.9%
Year-Over-Year: 20.2%
Boston, Mass.
August/July: 0.5%
Year-Over-Year: 17.7%
Charlotte, N.C.
August/July: 1.5%
Year-Over-Year: 21.7%
Chicago, Ill.
August/July: 1.0%
Year-Over-Year: 12.7%
Cleveland, Ohio
August/July: 0.8%
Year-Over-Year: 15.5%
Dallas, Texas
August/July: 1.8%
Year-Over-Year: 24.6%
Denver, Colo.
August/July: 0.9%
Year-Over-Year: 21.5%
Detroit, Mich.
August/July: 0.7%
Year-Over-Year: 15.7%
Las Vegas, Nev.
August/July: 2.2%
Year-Over-Year: 23.8%
Los Angeles, Calif.
August/July: 0.9%
Year-Over-Year: 18.4%
Miami, Fla.
August/July: 2.3%
Year-Over-Year: 23.8%
Minneapolis, Minn.
August/July: 0.3%
Year-Over-Year: 14.0%
New York, N.Y.
August/July: 0.5%
Year-Over-Year: 17.2%
Phoenix, Ariz.
August/July: 2.2%
Year-Over-Year: 33.3%
Portland, Ore.
August/July: 0.8%
Year-Over-Year: 19.2%
San Diego, Calif.
August/July: 0.5%
Year-Over-Year: 26.2%
San Francisco, Calif.
August/July: 0.4%
Year-Over-Year: 21.2%
Seattle, Wash.
August/July: 0.2%
Year-Over-Year: 24.3%
Tampa, Fla.
August/July: 2.5%
Year-Over-Year: 25.9%
Washington, D.C.
August/July: 0.6%
Year-Over-Year: 15.1%
What the Industry Is Saying:
“The U.S. housing market showed continuing strength in August 2021. Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred anyway over the next several years or reflects a secular change in locational preferences. August’s data are consistent with either explanation. August data also suggest that the growth in housing prices, while still very strong, may be beginning to decelerate.” — Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices
“The August S&P Case-Shiller Index reflected the nuanced changes in the housing market as it moved into fall. On the one hand, homebuyers continued to face a competitive market in which home prices increased at a double-digit pace, up 19.8% from one year ago nationwide. On the other hand, the rate of price growth steadied at the national level and slowed somewhat from the record gains seen in July in the 10- and 20-city indices as rising mortgage rates and home prices demand larger shares of homebuyers’ paychecks and cut into their ability to continue to meet or exceed asking prices.
“Going forward, the conditions buyers face are primarily dependent on two things: mortgage rates and housing supply. The average mortgage rate for a 30-year fixed-rate loan rose ten basis points from 2.77% to 2.87% in August and has breached 3.0% with no sign of slowing since then, limiting some buyers’ ability to push home prices higher.
“Further, the availability of homes for sale remains low as new construction climbs out of a decade-long deficit and the inventory of existing home listings continues to fall short from 2020 levels. Recently, we’ve seen trends in new sellers lag behind prior-year levels, but the deficit is shrinking. With existing owners hesitating to jump into a housing market tipped so far in sellers’ favor, more homes for sale are likely just what buyers and, paradoxically, sellers need.” — Danielle Hale, Chief Economist, realtor.com®
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news to jgrice@rismedia.com.
