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U.S. home prices rose modestly in August, with both the Federal Housing Finance Agency (FHFA) and S&P CoreLogic Case-Shiller Indices recording a 4.2 percent annual gain despite affordability challenges, both entities reported on Tuesday.
The FHFA House Price Index (HPI) showed a 0.3 percent increase in home prices from July to August, with the previously reported July gain revised up to 0.2 percent, according to the FHFA. Monthly price changes across the nine census divisions varied from a 0.1 percent decline in East North Central and New England to a 0.9 percent increase in West North Central.
Annual growth across these divisions was positive, ranging from 2.4 percent in the West South-Central to 6.3 percent in East North Central, although affordability challenges persist, according to FHFA Deputy Director Dr. Anju Vajja.
“House price appreciation in the United States remained modest for the sixth consecutive month,” Dr. Vajja added, citing the effect of locked-in interest rates on affordability.
The S&P CoreLogic Case-Shiller Index offered further insights into regional variations. Year-over-year, the 10-City Composite rose by 6.0 percent, while the 20-City Composite posted a 5.2 percent increase, with New York, Las Vegas and Chicago leading the gains.
Month-over-month, the unadjusted national index saw a slight decrease of 0.1 percent but rose by 0.3 percent when seasonally adjusted.
Selma Hepp
CoreLogic Chief Economist Dr. Selma Hepp told Inman, “Despite much-needed optimism, brought on by a sharp decline in mortgage rates in August, the boost was short-lived and not enough to renew homebuyers’ interest.”
She continued, “As a result, home prices continued to weaken relative to their seasonal trend and year-over-year gains took a step back. Nevertheless, bifurcation in housing demand and price growth remained, with the West and South seeing a stronger slowdown in home prices, while the Northeast and Midwest continued to experience robust gains.”
Brian Luke
Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices (DJI), also observed that “home price growth is beginning to show signs of strain, recording the slowest annual gain since mortgage rates peaked in 2023.” He attributed part of this to the typical seasonal slowdown as “home price shoppers appeared less willing to push the index higher than in the summer months.”
Price resilience has been particularly strong in the Northeast, with New York reaching record highs.
Markets in blue states have slightly outperformed red states since mid-2023, with the Northeast and some Western areas seeing sustained growth compared to the South and West, where affordability constraints weigh heavily on price gains.
