Home prices in the 20 biggest U.S. metros rose for the sixth month in a row, as the housing market continues to deal with a shortage of homes for sale.
The S&P CoreLogic Case-Shiller 20-city house price index rose 1% in August, as compared with the previous month.
On a year-over-year basis, home prices in the 20 major metro markets in the U.S. were up 2.2% nationally.
A broader measure of home prices, the national index, rose on a month-over-month basis in August by 0.9%, but rose 2.6% over the past year. All numbers are seasonally adjusted.
Key details: Chicago posted the strongest year-over-year home-price gains in the month of August, at 5%. It was the fourth month in a row that the city led the rankings.
New York and Detroit followed, up 4.98% and 4.8% respectively.
The West continued to lag behind the rest of the country: Home prices fell in Las Vegas and Phoenix the most.
| Cities | Change from last year |
| Atlanta | 3.4% |
| Boston | 3.1% |
| Charlotte | 3% |
| Chicago | 5% |
| Cleveland | 3.9% |
| Dallas | -1.7% |
| Denver | -0.6% |
| Detroit | 4.8% |
| Las Vegas | -4.9% |
| Los Angeles | 3.2% |
| Miami | 3.3% |
| Minneapolis | 1.9% |
| New York | 5% |
| Phoenix | -3.9% |
| Portland | -1.5% |
| San Diego | 4.1% |
| San Francisco | -2.5% |
| Seattle | -1.5% |
| Tampa | 0% |
| Washington | 3.4% |
| Composite-20 | 2.2% |
A separate report from the Federal Housing Finance Agency also showed home prices rose in August, up 0.6% from July.
And over the last year, the FHFA index was up 5.6%.
Home prices were the strongest in the Middle Atlantic region, according to the government’s data.
Big picture: With homeowners not keen on selling their homes, the U.S. housing market will continue to face a shortage of homes for sale, and by extension, see home prices rise. Interested buyers continue to converge on limited inventory.
Until supply catches up, barring any major events, we’re not likely to see a big movement in home prices.
What S&P said: “On a year-to-date basis, the National Composite has risen 5.8%, which is well above the median full calendar year increase in more than 35 years of data,” said Craig J. Lazzara, managing director at S&P DJI.
“The year’s increase in mortgage rates has surely suppressed housing demand, but after years of very low rates, it seems to have suppressed supply even more,” he added.
“Unless higher rates or other events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results,” Lazzara said.
What are they saying? “Another large gain in house prices in August suggests that the extremely limited supply of existing homes for sale continued to outweigh high mortgage rates,” Thomas Ryan, property economist at Capital Economics, wrote in a note.
“We think monthly gains in house prices will soften over the remainder of the year in response to the rise in mortgage rates to just under 8.0%. But an extreme lack of inventory in the existing homes market means we don’t anticipate any further house price falls,” he added.
Market reaction: Stocks were up in early trading on Tuesday. The yield on the 10-year Treasury note fell below 4.9%.
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