A cocktail of demographic and economic factors continue to spearhead higher home prices. That has contributed to the U.S. index reaching a new record high in June, according the National Home Price Index for June 2020 morning, issued by S&P CoreLogic Shiller. [1]
The report, however, indicates a slowing month-over-month growth.
Covering all nine U.S. census divisions, in June, the Index reported an annual spurt of 4.3%, mirroring the month before. Meantime, the 10-City Composite checked in at 2.8%, sagging from the previous month, which came in at 3.0%. Another downer: the 20-City Composite chimed in at a year-over-year gain of 3.5%, falling short of 3.6% the month before.
In June, among the 19 cities; excluding Detroit, at 9.0%, Phoenix paced the pack among those reporting the highest year-over-year gains. Next was Seattle at 6.5%, followed by Tampa, 5.9%. Higher strides in prices in the year ending June 2020 versus the year ending May 2020 were reported by five of the 19 cities.
A 0.6% spike month-over-month was posted by the National Index. The 10-City and 20-City Composites, meanwhile, parachuted 0.1% and 0.2% respectively preceding seasonal adjustment in June, after which a 0.2% month-over-month hike was registered by the National Index. There was a drop off of 0.1% in the 10-City Composite and no gains posted in the 20-City Composite.
With the exception of Detroit, 16 of 19 cities reported increases before seasonal adjustment in June. Following seasonal adjustment, 12 of the 19 cities reported jumps.
June’s gains were quite broad-based, said Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices. “Prices increased in all 19 cities for which we have data, accelerating in five of them.” Phoenix retains the top spot for the 13th consecutive month, he continued, with a gain of 9.0% for June.
In Seattle, there was a jump of 6.5% in home prices, while Tampa chimed in at 5.9%, Charlotte, 5.7%, he noted. “As has been the case for the last several months, prices were particularly strong in the Southeast and West, and comparatively weak in the Midwest and, especially, Northeast.”
Added Selma Hepp, deputy chief economist for CoreLogic: "The strength of the Case-Shiller index reflects an ideal confluence of demographic and home buying fundamentals which keep driving home prices higher.” On one hand, she added, there's a very limited supply of homes; on the other, a strong millennial demand driven by record-low mortgage rates and a need for more space. “But the housing market also highlights the tale of two income stratums, said Hepp. In one group, there are those who lost their income and are relying on forbearance programs; in the other group, which fared better, individuals are able to purchase a home.
It should be noted that for March through June, transaction records are unavailable for Wayne County.
Last month, reportedly [2], in May, there was an uptick of 4.5% year-over-year in the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine census divisions. However, that reflected a droop from April’s 4.6% annual uptick.
What’s more, the 10-City Composite’s 3.1% annual increase fell short of the 3.3 level the month before. Meantime, the 20-City Composite’s 3.7% year-over-year gain fell short of the 3.9% gain recorded the previous month.