U.S. housing market rebounds with price gains in July and August

September 26, 2023 07:56 PM AEST | By Investing
Follow us on Google News:

After a period of decline, the U.S. housing market has seen a positive shift in recent months, with home prices surpassing year-ago levels for the first time in five months in July, according to economists. This upward trend is believed to have continued into August.

On Monday, it was reported that the S&P CoreLogic Case-Shiller home price indices, a key indicator of housing market trends, are expected to show an increase of 0.3% in home prices in 20 significant metropolitan areas across the nation in July compared to the same month last year. This would mark the first increase since February. In June, the index was 1.2% below the record high set a year earlier.

The anticipated positive reading in the 20-city index would represent an end to a minor downturn in home prices. Unadjusted prices, as measured by the Case-Shiller 20-city index, decreased by just under 7% from their peak following a substantial rise in mortgage rates at the end of 2022 and throughout 2023.

Despite home prices dipping below year-ago levels for the first time in February, monthly data suggests that most of this sharp downturn occurred in late 2022. The decline in 2023 resulted from home prices failing to reach their previous peaks during the year.

More recent but less comprehensive data suggests that home prices have exceeded year-ago levels for two consecutive months due to high mortgage rates discouraging sellers from putting their homes on the market. Last week, Freddie Mac reported that the average 30-year fixed mortgage rate was 7.19%, nearly one percentage point higher than a year ago and significantly above the sub-3% rates prevalent earlier during the pandemic.

Data from CoreLogic's separate home price index, released about two weeks before Case-Shiller's data, showed that July's national home prices were 2.5% higher than the previous year.

Furthermore, the National Association of Realtors reported that existing homes in August were sold at the slowest seasonally adjusted annual rate since January. However, prices have seen an uptick. Last month's median home sold for $407,100, a price 3.9% higher than one year prior. This marks the second consecutive month of positive year-over-year price gains, beginning in July.

While home prices seem to be on the rise, these recent figures are significantly lower than the extraordinary price appreciation witnessed earlier during the pandemic. High mortgage rates have put a damper on further price spikes, with monthly increases reverting to regular seasonal averages.

Although the 20-city index seems poised for a rise, it is not expected to be consistent across all regions. In June, prices were lowest compared to year-ago levels in San Francisco, Seattle, and Las Vegas, while they were highest in Chicago, Cleveland, and New York according to Case-Shiller data.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

This article first appeared in Investing.com


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK