Case-Shiller Home Price Index Hits 7th Straight Record High

Home prices by one key measure reached record highs for the seventh straight month, as low inventories and high demand continued to drive increases.

The Standard & Poor’s CoreLogic Case-Shiller National Home Price Index reported a 5.8% annual gain in June, up from 5.7% a year ago. The 10-City Composite posted a 4.9% annual increase, down from 5.0% a year ago. The 20-City Composite reported a 5.7% year-over-year gain, the same as a year ago.

On a monthly basis, the National Index posted a month-over-month gain of 0.9% in June. The 10-City and 20-City Composites both reported a 0.7% increase in June. After seasonal adjustment, the National Index recorded a 0.4% month-over-month increase. The 10-City Composite remained stagnant with no month-over-month increase. The 20-City Composite posted a 0.1% month-over-month increase.

The report said all 20 cities reported increases in June before seasonal adjustment; after seasonal adjustment, 14 cities saw prices rise. Seattle, Portland, and Dallas reported the highest year-over-year gains among the 20 cities. In June, Seattle led with a 13.4% year-over-year price increase, followed by Portland with 8.2% and Dallas with a 7.7% increase. Nine cities reported greater price increases in the year ending June versus the year ending May. As of June, average home prices for the MSAs within the 10-City and 20-City Composites are back to their winter 2007 levels.

“Price increases are supported by a tight housing market, said David Blitzer, Managing Director and Chairman of the Index Committee with S&P Dow Jones Indices. “Both the number of homes for sale and the number of days a house is on the market have declined for four to five years. Currently the months-supply of existing homes for sale is low, at 4.2 months. In addition, housing starts remain below their pre-financial crisis peak as new home sales have not recovered as fast as existing home sales.”

“It’s a new normal in the housing market,” said Cheryl Young, senior economist with Trulia, San Francisco. “Ever-rising prices being met by insatiable demand. Demand remains unimpeded by exceptionally low inventory as homebuyers enjoyed strong job growth and low mortgage rates, driving prices ever higher.”

Mark Vitner, senior economist with Wells Fargo Securities, Charlotte, N.C., said home prices show no sign of slowing down.

“Strong job and income growth is driving demand, while tight inventories are making it an ideal sellers’ market,” Vitner said. “Homes are selling incredibly quickly and starts remain well below previous norms, which is keeping inventories incredibly tight.”