The Case Shiller Home Price Index, which is seen as the most accurate gauge of home appreciation, showed that home prices rose 0.9% for the month of August. This index is on pace for 6% appreciation this year, even in the face of higher interest rates. Since January of this year, home prices have been on the rise. Home prices are now up 2.6% year over year and 1.5% above their peak which was in June.
The Federal Housing Finance Agency (FHFA) released their House Price Index which is slightly different from the Case Shiller Index. The FHFA measures home price appreciation on single-family homes with conforming loan amounts and does not include cash buyers or jumbo loans. The FHFA reported that prices rose 0.6% in August and are up 5.6% year over year. This index is now almost 4.7% above last year’s peak.
When looking at the top five appreciation indexes, the Case Shiller, FHFA, CoreLogic, Black Knight, and Zillow, it is prevalent that home values are setting new all-time highs, surpassing the peak from last year and more than recovering from the downturn we saw in the second half of 2022.
In 2023, home values are on pace to appreciate 6-8% based on their pace through August. We may see this pace slow through the end of the year, due to seasonality effects and inventory growth in some sectors, but we are still on track for positive home appreciation.
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By: Jon Iacono