Written by Safia Riedel
(Reuters) – US home prices rose on a monthly basis in June while annual prices were unchanged, adding to a growing body of evidence that housing costs are already beginning to recover.
The S&P CoreLogic Case-Shiller National Home Price Index, which covers all nine US Census Divisions, rose 0.7% month over month in June on a seasonally adjusted basis after rising 0.8% in May. Another index tracking the 20 largest metropolitan areas rose 0.9 percent month-on-month, beating estimates in a Reuters poll of economists for a 0.8 percent gain.
On a yearly basis, the national price index remained unchanged in June versus a 0.4% decline in May. The 20-city index fell -1.2% in June after declining -1.7% y/y in May, a possible sign that the expected arrival in prices may be materializing.
Craig Lazzara, managing director at S&P DJI, confirmed the trend, noting that the national composite is up 4.7% year-to-date, faster than the average historical increase for the full year.
“We recognize that market gains could be offset by increases in mortgage interest rates or general economic weakness, but the breadth and strength of this month’s report is consistent with the optimistic view of future results,” he said.
The housing market has been highly sensitive to the Fed’s rate hike campaign, with sales slowing sharply after the Fed began raising interest rates in March 2022. But demand has remained relatively resilient against the highest mortgage rates since 2001, and an acute shortage of housing. housing. Existing homes on the market have supported prices in recent months.
This may be unwelcome news for the US central bank. In a speech at the annual economic policy symposium in Jackson Hole on Friday, Fed Chair Jerome Powell cited the “potential” housing sector among a number of strong economic indicators that could force the Fed to continue raising interest rates.
The strongest gains were recorded in Chicago and Cleveland, and the largest declines in prices in San Francisco and Seattle.
(Reporting by Safia Riedel; Editing by Dan Burns)
