The S&P/Case-Shiller U.S. National Home Price Index remained virtually unchanged since July, when gains rose 19.7 percent while continuing a 15-month streak of upward growth.
Released Tuesday, the index remained virtually unchanged since July, when gains rose to 19.7 percent while continuing a 15-month streak of upward growth, unprecedented in at least three decades. Prices in the index’s 10-city and 20-city composites fell modestly, from 19.2 percent to 18.6 percent in the top 10 metros and from 20 percent to 19.7 percent in the 20 largest, according to the index.
Nonetheless, overall growth is still at a historical high.
“The U.S. housing market showed continuing strength in August 2021,” Craig J. Lazzara, managing director and global head of Index Investment Strategy at S&P DJI, said in a statement. “Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels.”
Like the previous month, Phoenix (33.3 percent) and San Diego (26.2 percent) led the way as the cities with the highest annual growth but Tampa pushed out Seattle for third place with 25.9 percent growth in August. Such high numbers are the result of several converging factors — low inventory, low mortgage rates and the rush of investors who are trying to cash in on growth by putting in higher and higher offers.
“Persistently strong demand among traditional homebuyers has been amplified by an increase in demand among investors this summer,” Selma Hepp, CoreLogic Deputy Chief Economist, said in a prepared statement. “Together, demand pressures continue to drive home price growth higher despite some early signs of buyer fatigue and slight improvements in the availability of for-sale homes. And while strong home price appreciation rates are narrowing the pool of buyers, particularly first-time buyers, the depth of the supply and demand imbalance and robust demand among higher-income earners will continue to push prices higher.”
Despite the historic gains, data released simultaneously on Tuesday by the Federal Housing Finance Agency, indicated that stratospheric year-over-year gains, made possible due to a seemingly endless streak of monthly increases, may have peaked in August as month-over-month price hikes continued to decelerate.
According to the FHFA data, home prices nationwide inched up 1 percent in August from the previous month and soared 18.5 percent from the year before, signaling that annual gains may have finally peaked.
“Annual house price gains remained extremely high in August but the pace of month-over-month gains continues to decelerate,” Dr. Lynn Fisher, the FHFA’s deputy director of the division of research and statistics, said in a statement. “This does not mean house prices are at risk of declining — far from it, they continue to climb at a double-digit pace in all regions — but it does suggest we may have seen the peak in annual gains for the time being.”
The S&P/Case-Shiller U.S. National Home Price Index is “a composite of single-family home price indices that is calculated every month; the indices for the nine U.S. Census divisions are calculated using estimates of the aggregate value of single-family housing stock for the time period in question.”