Home prices are weakening but still much higher than they were a year ago: S&P Case Shiller

Home prices in June were 18% higher than in the same month a year ago, according to S&P CoreLogic Case-Shiller Indicators.

That’s a weaker pace than in May of this year, which showed a year-on-year gain of 19.9%. The 10-city composite rose 17.4%, down from 19.1% in the previous month. The 20-city composite was up 18.6% year over year, down from 20.5% in May.

Among the 20 cities, Tampa, Florida, Miami, and Dallas had the highest pace year-over-year in June, with increases of 35%, 33%, and 28.2%, respectively. Only one of the 20 cities reported higher price increases in the year ending June 2022 than in the year ending May 2022.

“It’s important to keep in mind that a slowdown and a downturn are two very different things, and prices are still going up at a solid clip,” Craig Lazzara, managing director of S&P Dow Jones Indices, wrote in a statement. “The June growth rates for all three compounds are equal to or greater than 95 percent of historical experience. In the first six months of 2022, in fact, the national compound rose 10.6%.”

In the past 35 years, he said, only four full years have seen significant increases of this magnitude.

Another report last week showed home prices fell 0.77% from June to July. It was the first monthly decline in nearly three years, according to Black Knight, a mortgage software, data and analytics company.

Although the drop may seem small, it is the largest one-month price drop since January 2011. It is also the second-worst performer in July dating back to 1991, after falling 0.9% in July 2010, during the Great Recession.

Home prices are dropping due to rising mortgage rates, making the already expensive housing market even more so. Sales of both new and existing homes have been down for several months, leading some economists to call a housing slump.

“We previously noted that mortgage financing has become more expensive as the Federal Reserve raises rates, a process that has continued with the June data collection. As the macroeconomic environment continues to challenge, home prices may continue to slow,” Lazarra said.