US home prices reached an unprecedented peak in August, even as the annual growth rate slowed to its lowest point since mortgage rates surged last year. The latest figures from S&P Global's S&P Dow Jones Indices revealed that the S&P CoreLogic Case-Shiller Index increased by 0.32% month-over-month in August, following a seasonal adjustment.
This growth came after a more modest 0.08% gain in July. The seasonally adjusted composite indices for 10 and 20 cities reported rises of 0.34% and 0.35%, respectively, showing a notable increase from the previous month’s performance. On an annual basis, home prices across the nation climbed 4.2% in August, which marks a reduction from the 4.8% rise witnessed in the preceding month.
The 10-city index displayed a 6% increase, down from a 6.8% uptick in July, while the 20-city composite saw a 5.2% rise compared to 5.9% in July. "After adjusting for seasonal variations in the data, home prices have consistently reached record highs for 15 consecutive months," stated Brian Luke, the head of commodities and digital assets at S&P Dow Jones Indices.
He cautioned, however, that price growth is beginning to exhibit signs of strain, with the current annual increase being the slowest since mortgage rates peaked earlier in 2023. Among the cities surveyed, New York recorded the greatest annual price surge in August with an increase of 8.1%, followed closely by Las Vegas and Chicago.
Conversely, Denver experienced the least year-over-year growth at just 0.7%, according to the report. In related news, the Federal Housing Finance Agency reported a 0.3% rise in home prices on a seasonally adjusted basis for August, compared to the previous month’s revised 0.2% gain. Market expectations had anticipated only a modest 0.1% increase, as shown in a survey compiled by Bloomberg.
Annually, home prices saw a 4.2% increase in August. "House price appreciation in the US has remained subdued for six consecutive months," commented Anju Vajja, Deputy Director of the FHFA Division of Research and Statistics. "The ongoing slow yet sustained growth in house prices combined with locked-in interest rates has resulted in persistent challenges regarding housing affordability.".