The last time that the S&P CoreLogic Case-Shiller’s National Composite Index matched August’s 5.7% growth rate was 25 months ago, in July 2018. If it grows at similar rates in the following months, S&P Dow Jones Indices is ready to conclude that the COVID-related deceleration is behind us.
“A trend of accelerating increases in the National Composite Index began in August 2019 but was interrupted in May and June, as COVID-related restrictions produced modestly-decelerating price gains,” Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices said in a prepared statement. “We speculated last month that the accelerating trend might have resumed, and August’s results easily bear that interpretation.”
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index was up from 4.8% in July. The 10-City Composite annual increase came in at 4.7%, up from 3.5% in the previous month. The 20-City Composite posted a 5.2% year-over-year gain, up from 4.1% in the previous month.
August was the 15th consecutive month in which Phoenix home prices rose more than those of any other city, according to Lazzara. Phoenix posted a 9.9% year-over-year price increase, followed by Seattle with an 8.5% increase and San Diego with a 7.6% increase. All 19 cities (excluding Detroit, where there were reporting issues) reported higher price increases in the year ending August 2020 versus the year ending July 2020.
“It’s a measure of housing’s strength that even the worst-performing cities, Chicago (1.2%) and New York (2.8%), did better in August than in July,” Lazzara says. “Prices were strongest in the West and Southeast regions, and comparatively weak in the Midwest and Northeast.”
Before seasonal adjustment, the National Index posted a 1.1% month-over-month increase, while the 10-City and 20-City Composites both posted increases of 1.1% in August. After seasonal adjustment, the National Index posted a month-over-month increase of 1.0%, while the 10-City and 20-City Composites increased 0.5%. In August, all 19 cities (excluding Detroit) reported increases before seasonal adjustment. Seventeen of the 19 cities reported increases after seasonal adjustment.
The Zillow Real Estate Market Report also recently reported strong home sales numbers. The typical home value rose to $259,906 in September and the month-over-month growth rate moved up 0.8%, the most significant jump since November 2005, according to Zillow. The quarterly growth of 2.2% was the largest increase since 2013 and the annual growth of 5.8% was the largest in nearly two years.
“Home values are accelerating more quickly than any time since 2014, marking a sharp turnaround from a market briefly put on hold during the outbreak of the pandemic this spring,” said Zillow senior economist Jeff Tucker in a prepared statement.
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