The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.2% from June to July after seasonal adjustment, breaking the previous month’s all-time high. Home values in July were also 5% higher than a year earlier, following a 5.5% gain in June.
Case-Shiller’s 10-city (+6.8% YoY) and 20-city (+5.9% YoY) indices showed even higher growth than the nationwide figures, showing that big cities are outperforming the rest of the nation. In addition, lower-priced homes appreciated at a faster rate than the overall market, which makes sense as there is greater demand at the lower end of the market.
The Federal Housing Finance Agency’s (FHFA) House Price Index also showed that home prices rose 0.1% from June to July, and they were 4.5% higher when compared to the same time last year. Note that FHFA’s data does not include cash buyers or jumbo loans, only loans financed with conforming mortgages. These factors account for some of the differences in the two reports.
What’s the bottom line? S&P DJI’s Head of Commodities, Brian D. Luke, explained, “Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index.” Despite the negative media, national home prices continue to move higher and provide a significant wealth creation opportunity.