Home prices nationally rose 5.7% annually in August, up from the 4.8% annual increase in July, according to an update of the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index Tuesday, as the real estate market remains hot.
Phoenix, Seattle, and San Diego reported the highest year-over-year gains, with Phoenix showing a nearly 10% increase, marking the 15th consecutive month in which Phoenix home prices rose more than those of any other city.
The report covers 19 cities throughout the country. All of the cities reported year-over-year price increases in August.
“Housing prices were strong in August,” said Craig Lazzara, global head of index investment strategy at S&P Dow Jones Indices.
The last time that prices increased 5.7% year-over-year was in July of 2018. Prices were strongest in the West and Southeast regions. Seattle saw a year-over-year gain of 8.5%. Prices in San Diego jumped 7.6%.
“It’s a measure of housing’s strength that even the worst-performing cities, Chicago (1.2%) and New York (2.8%), did better in August than in July,” Lazzara said.
Year-over-year gains for these two cities in July were 0.8% and 1.3%, respectively.
Rock-bottom interest rates on mortgages have helped give prices a boost. The rate for a 30-year fixed-rate mortgage was 2.89% in September, according to Freddie Mac.
New home sales were more than 32% above the number sold in September of 2019, the Census Bureau reported Monday.
Lawrence Yun, chief economist at the National Association of Realtors, considered last month’s total to be “very strong.” He attributed the drop in new home sales in September to a lack of inventory and not less demand. “It’s just a very tight market,” Yun told the Washington Examiner.
There was a 3.6 month supply of new homes in September, the Census Bureau reported. That number is normally six to seven months, according to Yun.
Other aspects of the housing market also appear to be hot. Existing home sales soared 9.4% in September, up nearly 21% from one year ago, the NAR reported last week.
