Home Prices: An Unseasonal Summer Spike

The newly released national Case-Shiller Index shows that August housing market trends saw a huge shift from previous years. 

The demand for homes in August was high and price growth soared in most cities. Although sales volumes typically slow down towards the end of summer, the data shows that sales volumes and buying demand picked up speed in August.

An in-depth analysis from CoreLogic gives more insight into just how much housing trends defied the odds in August. The national Case-Shiller Index reached a new high by increasing 5.71% in August, which is the fastest growth rate reported since July of 2018. The month-to-month index increased by 1.06% from July, which is the fastest rate of growth since the spring of 2017. 

The demand for homes has remained high since mid-May, staying well above what the demand was around the same time in 2019. This year is likely to become the strongest year of home sales since 2006 if this trend continues into the next coming months. 

The demand for homes has only been exacerbated by the lack of inventory in 2020. The for-sale inventories at the beginning of this year were about 15% below the previous year’s inventories. Since the pandemic swept the country, inventories for homes for sale has fallen 25% below the home sale levels of 2019.

The lack of new homes for sale combined with a larger demand caused most cities to see a growth of home prices in August. Phoenix saw the strongest acceleration in home prices for the 14th consecutive month. In August, the home sale price went up by  9.9% since the same time last year. 

Seattle also held onto its spot in second place, with a year-over-year increase of 8.5% in home sale prices. San Diego increased by 7.6%, Cleveland prices grew by 6.9%, and Los Angeles went up 6.8%. These three cities are recent August additions to the top five cities with the most accelerated home price growth.

Across the nation, home prices were 21% higher in August than they were during the peak of spring 2006. Despite most cities seeing some growth in home prices, there were a few exceptions.  Las Vegas, Chicago, and Minneapolis all experienced slowing price growth in August. This is still an improvement from July, which saw eight different metro areas exhibiting slowing price growth.