Annual home-price growth slowed further in August, with year-over-year price gain shrinking for the fifth consecutive month, according to the S&P CoreLogic Case-Shiller National Home Price Index, released Tuesday.
Nationwide home prices posted a year gain of 13.0% in August, bringing the index to a reading of 303.76. In July, the index saw a year-over-year increase pf 15.6%.
“The forceful deceleration in U.S. housing prices that we noted a month ago continued in our report for August 2022,” Craig Lazzara, the managing director at S&P DJI, said in a statement. “For example, the National Composite Index rose by 13.0% for the 12 months ended in August, down from its 15.6% year-over-year growth in July. The -2.6% difference between those two monthly rates of change is the largest deceleration in the history of the index (with July’s deceleration now ranking as the second largest). These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since.”
Month over month, the U.S. National Index posted a seasonally adjusted decrease of 0.9% in home prices.
The Case-Shiller 20-city home price index posted a 13.1% annual increase, down from 16.0% a month prior. The annual increase brought the 20-city index to a reading of 310.99. All 20 of the cities analyzed posted lower price increases in the year ending August 2022 as compared to the year ending July 2022.
Home price growth in the 10-city home price index also slowed in August, recording a yearly gain of 12.1% to a reading of 322.06. In July, the 10-city index posted a year-over-year increase of 14.9%.
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Miami, Tampa and Charlotte had highest year over year gains among the 20 cities with annual gains of 18.6%, 28.0%, and 21.3%, respectively.
“On a month-over-month basis, the biggest declines occurred on the west coast, with San Francisco (-4.3%), Seattle (-3.9%), and San Diego (-2.8%) falling the most,” Lazzara said. “Despite the ongoing deceleration, August’s housing prices remain well above year-ago levels in all 20 cities. Florida continues to hold the top two spots. Price growth continued strongest in the Southeast (+24.5%) and South (+23.6%).”
With the Federal Reserve expected to increase interest rates potentially three more times in the coming months, Lazzara said he expects the drop in home price growth to continue.
“As the Federal Reserve moves interest rates higher, mortgage financing becomes more expensive and housing becomes less affordable,” Lazzara said. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to decelerate.”
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