by Calculated Risk on 9/28/2021 09:12:00 AM
S&P/Case-Shiller released the monthly Home Price Indices for July (“July” is a 3 month average of May, June and July prices).
This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census
divisions, reported a 19.7% annual gain in July, up from 18.7% in the previous month. The 10-City
Composite annual increase came in at 19.1%, up from 18.5% in the previous month. The 20-City
Composite posted a 19.9% year-over-year gain, up from 19.1% in the previous month.
Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in July.
Phoenix led the way with a 32.4% year-over-year price increase, followed by San Diego with a 27.8%
increase and Seattle with a 25.5% increase. Seventeen of the 20 cities reported higher price increases
in the year ending July 2021 versus the year ending June 2021.
Before seasonal adjustment, the U.S. National Index posted an 1.6% month-over-month increase in
July, while the 10-City and 20-City Composites both posted increases of 1.3% and 1.5%, respectively.
After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.5%, and
the 10-City and 20-City Composites both posted increases of 1.4% and 1.5%, respectively. In July, all
20 cities reported increases before and after seasonal adjustments.
“July 2021 is the fourth consecutive month in which the growth rate of housing prices set a record, says
Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “The
National Composite Index marked its fourteenth consecutive month of accelerating prices with a 19.7%
gain from year-ago levels, up from 18.7% in June and 16.9% in May. This acceleration is also reflected
in the 10- and 20-City Composites (up 19.1% and 19.9%, respectively). The last several months have
been extraordinary not only in the level of price gains, but in the consistency of gains across the
country. In July, all 20 cities rose, and 17 gained more in the 12 months ended in July than they had
gained in the 12 months ended in June. Home prices in 19 of our 20 cities now stand at all-time highs,
with the sole outlier (Chicago) only 0.3% below its 2006 peak. The National Composite, as well as the
10- and 20-City indices, are likewise at their all-time highs.
“July’s 19.7% price gain for the National Composite is the highest reading in more than 30 years of S&P
CoreLogic Case-Shiller data. This month, New York joined Boston, 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 quintile of historical performance; in 15 cities, price gains were in the top five percent of
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a
reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes.
July’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
The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).
The Composite 10 index is up 1.4% in July (SA).
The Composite 20 index is up 1.1% (SA) in July.
The National index is 43% above the bubble peak (SA), and up 1.5% (SA) in July. The National index is up 93% from the post-bubble low set in February 2012 (SA).
The Composite 10 SA is up 19.2% compared to July 2020. The Composite 20 SA is up 20.0% year-over-year.
The National index SA is up 19.7% year-over-year.
Price increases were close to expectations. I’ll have more later.