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US house prices pick back up in July

By Alexander Bueso

Date: Tuesday 26 Sep 2023

US house prices pick back up in July

(Sharecast News) - House price gains in the U.S. picked up in July, the results of two surveys showed.
The Federal Housing and Finance Agency's seasonally adjusted house price index jumped by 0.8% month-on-month (consensus: 0.5%).

In annual terms, prices were up by 4.6%, after a 3.2% advance over the 12 months to June.

"U.S. house prices continued to appreciate in July, consistent with the trend observed over the last several months," said Dr. Nataliya Polkovnichenko, supervisory economist in FHFA's Division of Research and Statistics.

"Regionally, all nine census divisions posted positive price appreciation over the last 12 months, although the Pacific and Mountain divisions experienced only modest growth."

The largest price increases month-on-month were registered in Middle Atlantic and South Atlantic census divisions where they rose by 1.4% in both.

The S&P CoreLogic Case-Shiller national home price index, which was published separately on Tuesday, also beat forecasts, rising by 0.6% in seasonally adjusted terms and by 1.0% in comparison to a year earlier.

A sub-index tracking prices in the 20 largest metro areas meanwhile jumped by 0.9% over the month, but was ahead by just 0.1% year-on-year.

"We have previously noted that home prices peaked in June 2022 and fell through January of 2023, declining by 5.0% in those seven months," said Craig J. Lazzara, managing director at S&P DJI.

"The increase in prices that began in January has now erased the earlier decline, so that July represents a new all-time high for the National Composite. Moreover, this recovery in home prices is broadly based."

For his part, Charlie Cornes at Capital Economics said: "The sixth consecutive rise in house prices in July showed that very tight supply is causing home prices to continue to rise despite sales volumes remaining weak, and suggests a second dip in house prices is highly unlikely.

"[...] That said, with the renewed increase in mortgage rates in August causing mortgage applications dipping back to 30-year lows and the economy slowing, we expect prices to stagnate, which will ultimately leave annual house price growth flat this year."

-- More to follow --

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