U.S. Home Prices Up 4.2% YoY in August, 20-City Index Gains 5.2% as High Rates

Regional Performance and City-Level Variations

The S&P CoreLogic Case-Shiller Index details regional performance, highlighting New York, Las Vegas, and Chicago as the leaders in annual price increases at 8.1%, 7.3%, and 7.2%, respectively. Denver showed the slowest annual growth, at just 0.7%, placing it below Portland for the first time since spring.

The 10-City and 20-City Composite indexes reported year-over-year gains of 6.0% and 5.2%, both down from previous months.

The FHFA House Price Index provides additional insights, with all nine U.S. census divisions showing positive annual growth. August’s monthly changes ranged from a 0.1% decline in the East North Central and New England divisions to a 0.9% increase in the West North Central division. Over the past year, the East North Central division led with a 6.3% gain, while the West South-Central division posted the slowest growth at 2.4%.

Impact of Mortgage Rates and Regional Disparities

The reports indicate a broad trend of decelerating home price growth, driven largely by high mortgage rates, which have dampened buyer demand and created affordability challenges. While the Northeast, particularly New York, remains the strongest region, the overall market shows a mixed performance. Analyst Brian D. Luke from S&P DJI notes that traditional blue states have outperformed red states since mid-2023, especially in the Northeast and West.

Market Outlook

As affordability pressures persist, house price growth is expected to remain modest, with potential further deceleration if mortgage rates remain elevated. August marks the sixth consecutive month of limited price appreciation, suggesting a cautious outlook for near-term price gains. Market dynamics appear slightly more favorable for regions with stronger employment and economic support, such as the Northeast, while other areas, particularly the South, may continue to see slower growth.