Price gains accelerated slightly in July, increasing on an annual basis by 4.7 percent compared to a 4.5 percent year-over-year increase in June. The S&P/Case-Shiller U.S. National Home Price Index was up 0.7 percent month-over-month on a non-adjusted basis and 0.4 percent seasonally adjusted.
The Case-Shiller 10-City Composite rose 4.5 percent compared to July 2014, about the same as the annual change in June. The 20-City Composite Index increased by 5% year-over-year, slightly more than it did in June. Both composites lost ground on a monthly basis, down 0.2 percent from June. All 20 cities tracked by the composites reported increases when unadjusted but after seasonal adjustment only nine were up while ten were down and one was unchanged.
Western cities dominated the annual gains, the largest in San Francisco and Denver at 10.4 and 10.3 percent respectively and the only cities in double digits. Dallas was third at 8.7 percent. Phoenix, with an annual increase of 4.6 percent, had the longest streak of year-over-year gains, eight consecutive months. Fourteen cities had larger year-over-year increases in July than in June; Boston had the most significant change, from 3.2 percent in June to 4.3 percent in July.
Western cities also led in monthly increases with six of the top ten gainers. Seattle was the only city in the West to post a June to July decrease.
David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices said "Prices of existing homes and housing overall are seeing strong growth and contributing to recent solid growth for the economy. The S&P/Case Shiller National Home Price Index has risen at a 4 percent or higher annual rate since September 2012, well ahead of inflation. Most of the strength is focused on states west of the Mississippi. The three cities with the largest cumulative price increases since January 2000 are all in California; Los Angeles (138 percent), San Francisco (116 percent) and San Diego (115 percent.) The two smallest gains since January 2000 are Detroit (3 percent) and Cleveland (10 percent). The Sunbelt cities - Miami, Tampa, Phoenix and Las Vegas - which were the poster children of the housing boom have yet to make new all-time highs.
"The economy grew at a 3.9 percent annual rate in the second quarter of 2015 with housing making a major contribution," Blitzer said. "Residential investment grew at an annual real rate of 9-10 percent in the last three quarters, far faster than total GDP. Further, expenditures on furniture and household equipment, a sector that depends on home sales and housing construction, also surpassed total GDP growth rates. Other positive indicators of current and expected future housing activity include gains in sales of new and existing housing and the National Association of Home Builders sentiment index. An interest rate increase by the Federal Reserve, now expected in December by many analysts, is not likely to derail the strong housing performance."
As of July the average price for the metropolitan statistical areas (MSAs) within the 10-City and 20-City Composites are back to levels last seen in the winter of 2005. Measured from their June/July 2006 peaks the 10- and 20-City Composite prices have declined by approximately 11-13 percent and they have recovered from March 2012 lows by 34.4 percent and 35.7 percent respectively.
The S&P/Case-Shiller Home Price Indices are constructed to accurately track the price path of typical single-family home pairs for thousands of individual houses from the available universe of arms-length sales data. The S&P/Case-Shiller National U.S. Home Price Index tracks the value of single-family housing within the United States. The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market.
The 10-City Composite currently has an index level of 196.85 and the 20-City a value of 181.90. The National Index is at 175.1. Detroit is the city with the lowest index at 103.42 and Los Angeles has the highest at 238.24
