Home price appreciation slowed somewhat at the beginning of 2016, but the combination of persistently tight inventory along with increased existing-home sales has led to home price appreciation regaining its earlier momentum, according to two indices released on Tuesday.
The S&P CoreLogic Case-Shiller National Home Price Index indicated an annual price gain of 5.3 percent in August, higher than July’s 5.0 percent. And according to the National Association of Home Builders (NAHB), the seasonally adjusted annual rate of price appreciation for August is 7.6 percent, more than two and a half percentage points higher than in July.
“August Case-Shiller numbers suggest housing price trajectory is picking up again, as it was the second month where price growth was larger than the previous month,” Trulia Chief Economist Ralph McLaughlin said. “Earlier this year, price growth slid for five consecutive months and raised questions about where home prices were heading. We’re now seeing a reversing of that trend.”
Case-Shiller’s 10-City Composite Index increased by 4.3 percent over-the-year in August, a slight increase from an annual gain of 4.1 percent in July. The 20-city composite index rose annually by 5.1 percent in August, a notch higher than 5.0 percent in July. Portland and Seattle had the highest rates of annual appreciation in August with 11.7 and 11.4 percent, respectively.
“Supported by continued moderate economic growth, home prices extended recent gains,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “All 20 cities saw prices higher than a year earlier with 10 enjoying larger annual gains than last month. The seasonally adjusted month-over-month data showed that home prices in 14 cities were higher in August than in July. Other housing data including sales of existing single-family homes, measures of housing affordability, and permits for new construction also point to a reasonably healthy housing market.”
Also on Tuesday, FHFA’s House Price Index, which is calculated using home sales price information on mortgages sold to or guaranteed by Fannie Mae and Freddie Mac, reported over-the-month price appreciation of 0.7 percent in August, a faster rate of appreciation than July’s 0.5 percent. FHFA’s index also reported year-over-year price growth of 6.4 percent in August; NAHB reported FHFA’s seasonally adjusted annual rate of appreciation at 8.9 percent, more than three percentage points higher than July’s seasonally annual adjusted rate of 5.7 percent.
Click here to view the Case-Shiller Index.
Click here to view the FHFA’s House Price Index for August.