Report: Home Prices Continued Upward Trend in July

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, today reported a 1% annual change in July, up from a 0% change in June. The 10-City Composite showed an increase of 0.9%, which improves from a -0.5% loss in the previous month. The 20-City Composite posted a year-over-year increase of 0.1%, improving from a loss of -1.2% in the previous month.

Chicago, Cleveland and New York led the way for the third consecutive month, reporting the highest year-over-year gains among the 20 cities in July. Chicago remained in the top spot with a 4.4% year-over-year price increase, while Cleveland took the second spot with a 4% increase, and New York came in third at 3.8%. For this month, eight out of 20 cities reported lower prices, and 12 of 20 reported higher prices in the year ending July 2023 versus the year ending June 2023.

“U.S. home prices continued to rally in July 2023,” said Craig J. Lazzara, managing director at S&P DJI. “Our National Composite rose by 0.6% in July, and now stands 1% above its year-ago level. Our 10- and 20-City Composites each also rose in July 2023, and likewise stand slightly above their July 2022 levels. 

“We have previously noted that home prices peaked in June 2022 and fell through January of 2023, declining by 5% in those seven months. The increase in prices that began in January has now erased the earlier decline, so that July represents a new all-time high for the National Composite. Moreover, this recovery in home prices is broadly based. As was the case last month, 10 of the 20 cities in our sample have reached all-time high levels. In July, prices rose in all 20 cities after seasonal adjustment (and in 19 of them before adjustment).

“On a year-to-date basis, the National Composite has risen 5.3%, which is well above the median full calendar year increase in more than 35 years of data. Although the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

Realtor.com Chief Economist Danielle Hale commented, “Although the recovery in housing was broad-based in the first half of the year thanks to the swoon in mortgage rates, regional performance has varied, and this could intensify now that mortgage rates are back above year-ago highs. In some areas, like this year’s hottest zip codes which are concentrated in the Midwest and Northeast, high buyer demand has far outpaced home inventory, keeping home prices climbing. In other areas, particularly markets in the South, home listing prices continue to lag year-ago levels, as sellers approach the market with the clear-eyed realization that supply has held up better in these areas. Mirroring these trends, the top three metro-area markets according to the Case Shiller Index were again Chicago (+4.4%), Cleveland (+4.0%), and New York (+3.8%), while Las Vegas (-7.2%) and Phoenix (-6.6%) saw slowing home prices in July.”

“The rental market has offered a more extended break in pricing, with rents dipping for a fourth month compared to a year ago. Even here, the cumulative drop in rents is relatively modest nationwide–down less than 2% from the peak. Furthermore, regional trends vary, with some markets still seeing relatively robust rental growth. Fortunately for renters, a record-high number of multi-family units are on the way, which will provide some sustained relief over the next several months, even as multi-family starts slow. 

“Taken together, trends in the for-sale and for-rent markets suggest that modest relief from today’s record-high unaffordability is on the way, but it will take time to unfold. In the meantime, households who need to move now and are ready to buy can find some solace in the fact that relatively predictable seasonal trends point to the week of October 1 – 7 as the best time to buy this year. During this week, home shoppers can expect to find more homes for sale and lower buyer demand than the typical week alongside prices that are below the year’s peak price.”