The latest data from the leading index on home prices showed the largest month-to-month deceleration in prices in history, with a 2.3% deceleration between June and July, as the possibility of a painful housing correction continues to loom.
The S&P CoreLogic Case-Shiller U.S. National Home Price Index showed that prices were up 15.8% year-over-year in July, down from 18.1% the previous month.
As home sales, permits, new construction and broker confidence have all plummeted over the last few months, prices have remained more resilient as low inventory and a strong job market prop up home values. As prices moderate from pandemic highs, there continue to be signs that the process could be a bump rather than a crash—though this month’s report will certainly have some feeling a little more concerned.
Key findings:
- The 10-City Composite annual increase came in at 14.9%, down from 17.4% in the previous month.
- Tampa, Miami and Dallas reported the highest year-over-year gains in the 20-City Composite in July. Tampa led the way with a 31.8% year-over-year price increase followed by Miami in second with a 31.7% increase and Dallas in third with a 24.7% increase.
- All 20 cities reported lower price increases in the year ending July 2022 versus the year ending June 2022.
- Price growth was strongest in the Southeast (+27.5%) and South (+26.9%).
- Only 7 cities reported increases before and after seasonal adjustments.
The takeaway:
“Although U.S. housing prices remain substantially above their year-ago levels, July’s report reflects a forceful deceleration,” said Craig J. Lazzara, managing director at S&P DJI, in a statement. “As the Federal Reserve continues to move interest rates upward, mortgage financing has become more expensive, a process that continues to this day. Given the prospects for a more challenging macroeconomic environment, home prices may well continue to decelerate.”
