Two new reports show that U.S. home prices continued their skyward vault in July, as supply shortages and strong demand combined to keep buying pressure high.
Single-family home prices across the United States rose at a record 19.7 percent annual pace in July, according to the S&P CoreLogic Case-Shiller national composite home price index (pdf), released on Sept. 28.
That’s the largest annual price gain in the history of the series, which goes back by about 30 years.
“July 2021 is the fourth consecutive month in which the growth rate of housing prices set a record,” Craig Lazzara, managing director and global head of index investment strategy at S&P DJI, said in a statement.
“The National Composite Index marked its [14th] consecutive month of accelerating prices with a 19.7 percent gain from year-ago levels, up from 18.7 percent in June and 16.9 percent in May.”
Single-family home prices in 20 key urban markets rose by 19.9 percent in July year-over-year, up from 19.1 percent in June and marking the largest annual price increase in the 20-year history of the 20-city composite measure.
“Home prices in 19 of our 20 cities now stand at all-time highs, with the sole outlier (Chicago) only 0.3 percent below its 2006 peak,” Lazzara said.
A Sept. 28 report from the Federal Housing Finance Agency (FHFA), which uses slightly different data from the Case-Shiller measures, showed single-family house prices rose by 19.2 percent over the year in July, a record high.
“Record appreciation rates for the U.S. continued in July,” Lynn Fisher, deputy director of FHFA’s Division of Research and Statistics, said in a statement. “Although the monthly pace of increase slowed in most Census Divisions in July, four areas experienced year-over-year growth rates in excess of 20 percent and all saw annual gains in excess of 15 percent.”
Sales of new single-family homes increased in August for the second month in a row, according to a Commerce Department report released last week (pdf).
The report shows that the median price of a new single-family home in August remained unchanged from July and stood at $390,900. This represents an increase of 20 percent from August 2020, when the median price was $325,500.
Housing inventory edged up in August compared to July, with the Commerce Department report showing that there were 378,000 units available in August, or 6.1 months worth of inventory at the current sales rate, compared to 366,000 in July, or 6.0 months worth of inventory.
Inventory was up sharply in August 2021 compared to a year prior, when there were 3.5 months worth of supply.
By Tom Ozimek
Tom Ozimek has a broad background in journalism, deposit insurance, marketing and communications, and adult education. The best writing advice he’s ever heard is from Roy Peter Clark: ‘Hit your target’ and ‘leave the best for last.’