S&P CoreLogic Case-Shiller National Home Price Index (HPI) Meets July Forecast

The S&P CoreLogic Case-Shiller National Home Price Index (HPI) covering all 9 U.S. census divisions continued to rise in July, gaining 0.3% to 5.9% and meeting the median economic forecast. The 10-City Composite showed a year-over-year increase of 5.2%, up from 4.9% the previous month. The 20-City Composite posted a 5.8% year-over-year gain, up from 5.6% the previous month.

Weakness in the Northeast were offset by strength in western and southern cities. Seattle (13.5%), Portland (7.6%), and Las Vegas (7.4%) reported the highest year-over-year gains among the 20 cities.

“Home prices over the past year rose at a 5.9% annual rate,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Consumers, through home buying and other spending, are the driving force in the current economic expansion.”

The August and September reports will include data on cities hit by Hurricane Harvey in Texas and Hurricane Irma in Florida, the former showing strength in Dallas (7.3%) and the latter in Miami (5.1%) and Tampa (7.0%). Regardless, judging by the tapering off of existing and new home sales, housing indicators may be leveling off even though home prices continue to rise.

“The housing market will face two contradicting challenges during the rest of2017 and into 2018,” Mr. Blitzer added. “First, rebuilding following hurricanes across Texas, Florida and other parts of the south will lead to further supply pressures. Second, the Fed’s recent move to shrink its balance sheet could push mortgage rates upward.”