Home Prices Tick Up But Decline in Real Terms

In July, the S&P Cotality Case-Shiller U.S. National Home Price Index recorded a 1.9% annual gain, up from a 1.6% rise in June. The 10-City Composite increased 3.4% year-over-year, up from a 3.0% gain the previous month, while the 20-City Composite moved up 2.5%, up from 2.2%. Chicago again posted the highest annual gain at 6.9%, followed by New York at 5.8% and Cleveland at 4.2%. Meanwhile, Seattle posted the lowest annual return, with prices falling 1.6%.

On a month-over-month basis, the U.S. National Index advanced 0.1% before seasonal adjustment. The 10-City Composite inched up less than 0.1%, while the 20-City Composite edged down less than 0.1%. After seasonal adjustment, the National Index and the 20-City Composite both rose 0.3%, while the 10-City Composite increased 0.4%. The Northeast and Midwest continue to outperform other regions, continuing a year-long trend. In addition to Seattle, Las Vegas (down 1.3%), Denver (down 1.1%), Tampa (down 0.7%), Portland (down 0.7%) and Dallas (down 0.4%) exhibited declines in July.

Despite stronger nominal home price appreciation, housing prices declined in real terms in July for the 14th consecutive month. At the same time, seasonal factors had a larger impact on home prices, with seasonally adjusted prices outpacing the non-seasonally adjusted measures in July. Looking forward, declines in core inflation could improve real home price gains.