The Case Shiller Home Price Index, which is one of the industry’s best gauges of home price appreciation, showed that home prices rose 0.6% in July. Home prices have been rising steadily since January 2023. Year over year, home prices are up 1% and are 0.6% above the peak in June of 2022. Home prices are now at their all-time high record levels. A lot of cities that saw huge appreciation in 2022 were hit hard during the move lower in home prices that occurred. However, many of these cities like New York, Chicago, and Cleveland are now leading the way in home price gains.
Another important report that was released was the Federal Housing Finance Agency’s House Price Index. This report differs from Case Shiller in that it measures home price appreciation on only single-family homes with conforming loan amounts and doesn’t take into account cash purchases. The FHFA saw home prices rise 0.8% in July and are now up 4.6% year over year. Home prices via this report are now almost 4.1% higher from the peak in June of 2022 and have continued to set new record highs every month since February of this year.
You can see when comparing these two reports that FHFA is stronger than Case Shiller, which is most likely due to the fact that when buyers offer cash for purchases they sometimes are able to receive discounts. Home price appreciation is on the rise and the FHFA is still on pace to see 7% appreciation for 2023 which is very strong.
On top of Case Shiller and FHFA showing big increases, there are other sources that are also showing acceleration in home price appreciation. For July, CoreLogic reported a 0.4% increase, Black Knight showed a 1.5% increase, and Zillow showed a 0.7% increase.
There are at least five well known sources of home price appreciation that are all showing a trend of increasing home price appreciation. While this can be challenging for home buyers, it is undeniably showing the strength and opportunity in the housing market.
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By: Jon Iacono