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YoY Home Price Surge Recorded in June

The latest S&P CoreLogic Case-Shiller Indices from S&P Dow Jones Indices (S&P DJI) shows that annual home price gains hit 18.6% year-over-year in June 2021, up from 16.8% in the previous month.

Covering all nine U.S. census divisions, the 10-City Composite annual increase came in at 18.5%, up from 16.6% in the previous month. The 20-City Composite posted a 19.1% year-over-year gain, up from 17.1% in the previous month.

Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in June. Phoenix led the way with a 29.3% year-over-year price increase, followed by San Diego with a 27.1% increase, and Seattle with a 25% increase. All 20 cities reported higher price increases in the year ending June 2021 versus the year ending May 2021.

“Tireless homebuyer demand pushed price growth to a new record high in June, with S&P CoreLogic national Case-Shiller Index clocking in an 18.6% year-over-year growth rate,” said CoreLogic Deputy Chief Economist Selma Hepp. “While the housing market feels like it has legs that never get tired, inventory and affordability constraints are still expected to put a damper on price growth. Some early data suggests that the buyer frenzy experienced this spring is tapering, though many buyers still remain in the market. Nevertheless, less competition and more for-sale homes suggest we may be seeing the peak of home price acceleration. Going forward, home price growth may ease off, but stay in the double digits through year-end.”

Before seasonal adjustment, the U.S. National Index posted a 2.2% month-over-month increase in June, while the 10-City and 20-City Composites both posted increases of 1.8% and 2.0%, respectively. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.8%, and the 10-City and 20-City Composites both posted increases of 1.6% and 1.8%, respectively. In June, all 20 cities reported increases before and after seasonal adjustments.

"June's 18.6% price gain for the National Composite is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data,” said Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “This month, Boston joined Charlotte, Cleveland, Dallas, Denver, and Seattle in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quartile of historical performance; in 19 cities, price gains were in top decile. We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. June's data are consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.”

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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