On a month-to-month basis, home prices are pulling back a bit, but that’s not necessarily bad news for the housing market since prices in many regions have been shooting up faster than household incomes.
Using the more viable year-over-year measure, home prices in July continued a strong pace, according to the just-released update from S&P/Case-Shiller.
The index measuring the U.S. overall, increased 4.7 percent in the 12 months ended in July, greater than a 4.5 percent increase in June. the S&P/Case-Shiller 10-city index gained 4.5 percent from a year earlier, compared with a 4.6 percent increase in June. The 20-city index gained 5% percent year-over-year.
Most economists had expected a 5.1 percent increase in the 20-city index.
David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said the home-price index has risen at a 4 percent or higher annual rate since September 2012. That easily beats inflation, but also soundly beats stagnant incomes levels.
Month-over-month price gains were modest. Not seasonally adjusted, the national U.S. Index rose 0.7 percent from June to July. The 10-city index and 20-city index both rose 0.6 percent month-over-month.
After seasonal adjustment the national index was up 0.4 percent. The 10-city and 20-city composite were both down 0.2 percent over the month.
“Most of the strength is focused on states west of the Mississippi,” Blitzer said. “The three cities with the largest cumulative price
increases since January 2000 are all in California: Los Angeles (138%), San Francisco (116%) and San Diego (115%). The
two smallest gains since January 2000 are Detroit (3%) and Cleveland (10%).”
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,” he added.