Home prices continued to gain momentum in August: Case-Shiller


Home prices once again defied affordability challenges, posting the seventh consecutive monthly gain since prices bottomed in January 2023, according to the latest S&P CoreLogic Case-Shiller Indices report.

Nationwide, home prices rose by 0.9% in August and now stand 2.6% above its year-ago level. The 10-city and 20-city composite gained 3% and 2.2% annually, respectively – the indices measure home prices in major metros across. Both indices posted a 1% month-over-month increase in August.

The uptick in home prices signals there is still some buyer demand despite soaring mortgage rates. The August Case-Shiller tracks June, July and August when mortgage rates climbed past 7%. Mortgage rates started the summer at 6.79% in the first week of June and rose 7.23% in August. While the higher rates have kept many away, home sales activity has dropped to the lowest level in 15 years – the low for-sale inventory has helped keep prices up.

“Although housing prices have increased significantly this year, climbing 5% from the early-year low, higher mortgage rates and seasonal trends will slow further monthly gains – with some possible declines in winter months,” CoreLogic Chief Economist Selma Hepp said. “Nevertheless, the year-to-date gains indicate that growth will pick up through the end of 2023 compared to last year’s slump during this time period.”

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These cities saw the largest house price gains

Chicago, New York and Detroit saw the most significant year-over-year gains among the 20 cities in August. Chicago remained in the top spot with a 5% year-over-year price increase. New York came in second, registering a 4.98% increase and Detroit recorded a 4.8% gain. 

The Western region continues to hold the lowest positions in the rankings, with Las Vegas experiencing a significant 4.9% decrease in home prices, while Phoenix witnessed a 3.9% decline in prices.

“The 10-city index includes currently better-performing metro areas, such as New York and Chicago, which have seen relatively stronger housing markets since mid-2022, as the return to cities and offices has gotten underway,” Hepp said. “Compared with the 2006 peak, the 10-city composite index is now 47% higher, while the 20-city composite is up by 55%.

“Adjusted for inflation, which is showing signs of easing, the 10-city index is now 1% above its 2006 level, while the 20-city index showed a 6% increase compared with its 2006 high point,” Hepp continued. “Nationally, home prices are 16% higher adjusted for inflation compared with 2006.”

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Slowdown in home prices ahead?

This year will likely end with roughly 4.1 million existing home sales nationwide, the fewest since the housing bubble burst in 2008 after the subprime mortgage crisis. Still, home prices are likely to remain resilient in the months ahead. How much they gain will depend on where mortgage rates head, according to Hepp. On an annual basis, home prices will likely remain positive, but if mortgage rates continue to climb, some monthly price declines could be in the cards. 

“Mortgage rates will continue to drive both the overall housing market and home prices changes,” Hepp said. “While low inventory continues to prop up home prices, high mortgage rates may be more crucial in the winter months to determine the market’s direction.

“Overall, however, demographics, equity-rich baby boomers and strong job markets continue to drive housing demand and put pressure on home prices in many markets,” Hepp continued. “This is especially true for markets with strong in-migration, robust job growth and relative affordability.”

If you’re looking to reduce your home buying costs, it could benefit you to compare your options to find the best mortgage rate. Visit Credible to speak with a home loan expert and get your questions answered.


Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.

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