Home Prices in August – Gains Continued

The Case-Shiller (CS) National Home Price Index, released by S&P Dow Jones Indices, rose in August. The index rose at a seasonally adjusted annual growth rate of 7.6%, faster than the 4.9% reported in July. After the deceleration in the beginning of 2016, house prices have accelerated since May due to tight inventory and the increases in existing home sales in the early part of this year.

The Home Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 8.9% in August, after the 5.7% increase in July, confirming the reacceleration in home prices.

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After the tumultuous boom and bust the increases of recent months have brought home prices more in line with long term trend levels and home prices are reaching the pre-recession peak in 2006.

Along with the gradual increases in national home prices, home prices gained in most metro areas in August. Figure 2 shows home price appreciation for 20 major U.S. metropolitan areas in August.

Among the 20 metro areas, San Francisco had the highest home price appreciation (12.2%), followed by Seattle (10.1%), Miami (7.2%) and Dallas (6.6%). Fifteen out of the 20 metro areas had positive home price appreciation, more metro areas reporting home prices increased than last month. Home price appreciation in the remaining five metro areas was negative. They are Minneapolis, Atlanta, Las Vegas, Chicago and Detroit, with the highest decline of 1.8% in Detroit.

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