House prices are weakening, but are still much higher than a year ago: S&P Case Shiller
A “For Sale” sign outside a house in Albany, California, Tuesday, May 31, 2022.
David Paul Morris | Bloomberg | Getty Images
House prices in June were 18% higher than in the same month last year, according to the S&P CoreLogic Case-Shiller indices.
This is a weaker pace than in May this year, which showed an annual gain of 1[ads1]9.9%. The 10-city composite rose 17.4%, down from 19.1% last month. The 20-city composite was 18.6% higher year-over-year, down from 20.5% in May.
Of the 20 cities, Tampa, Florida, Miami and Dallas posted the fastest year-over-year pace in June, with increases of 35%, 33% and 28.2%, respectively. Only one of the 20 cities reported higher price increases in the year ending June 2022 compared to the year ending May 2022.
“It’s important to remember that a slowdown and a decline are two very different things, and prices are still rising at a robust clip,” Craig Lazzara, managing director of S&P Dow Jones Indices, wrote in a release. “June growth rates for all three composites are at or above the 95th percentile of historical experience. For the first six months of 2022, the National Composite is actually up 10.6%.”
Over the past 35 years, only four full years have witnessed such large increases, he said.
Another report last week showed house prices fell 0.77% from June to July. It was the first monthly drop in nearly three years, according to Black Knight, a mortgage software, data and analytics firm.
While the drop may seem small, it is the largest one-month decline in prices since January 2011. It is also the second-worst July performance dating back to 1991, behind the 0.9% decline in July 2010, during the Great the recession.
House prices are falling due to rising mortgage rates, making an already expensive housing market even more so. Sales of both new and existing homes have been falling for months, prompting some economists to call it a housing recession.
“We previously noted that mortgage financing has become more expensive as the Federal Reserve raises interest rates, a process that continued as our June data was collected. As the macroeconomic environment continues to be challenging, home prices may well continue to decline,” Lazzara said. .