U.S. Home Prices Increased Again in August, Despite Pandemic

U.S. home prices continued to increase at a modest rate in August, rising 1.0% on a seasonally adjusted basis compared with July, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.

The index’s 10-city and 20-city composites, measuring home price growth in the largest U.S. cities, posted month-over-month increases of 0.5% each.

Year over year, home prices were up 5.7%.

“Housing prices were strong in August,” says Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a statement. “The national composite index gained 5.7 percent relative to its level a year ago, well ahead of July’s 4.8 percent increase.

“The 10- and 20-city composites – up 4.7 percent and 5.2 percent, respectively – also rose at an accelerating pace in August,” Lazzara says. “The strength of the housing market was consistent nationally – all 19 cities for which we have August data rose, and all 19 gained more in the 12 months ended in August than they had done in the 12 months ended in July.”

As Lazzara explains, the COVID-19 crisis slowed home price growth in May and June, but it re-accelerated starting in July.

“We speculated last month that the accelerating trend might have resumed, and August’s results easily bear that interpretation,” he says. “The last time that the national composite matched August’s 5.7 percent growth rate was 25 months ago, in July 2018. If future reports continue in this vein, we may soon be able to conclude that the COVID-related deceleration is behind us.” 

Phoenix, Seattle and San Diego reported the highest year-over-year gains among the 19 cities (excluding Detroit, which did not report data due to the crisis) in August. Phoenix led the way with a 9.9% year-over-year price increase, followed by Seattle (with an 8.5% increase) and San Diego (7.6%).

“Phoenix’s 9.9 percent increase topped the league table for August; this is the 15th consecutive month in which Phoenix home prices rose more than those of any other city,” Lazzara says. “Seattle, at 8.5 percent, once again took the silver medal, with San Diego, at 7.6 percent, in third place. It’s a measure of housing’s strength that even the worst-performing cities, Chicago, at 1.2 percent, and New York, at 2.8 percent, did better in August than in July. Prices were strongest in the West and Southeast regions, and comparatively weak in the Midwest and Northeast.” 

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