Home prices declined 0.2% m/m, below forecast (0.0%) and consensus (+0.1%) expectations.
All 20 cities in the index showed a year-over-year advance, led by a 10.4 percent increase in San Francisco and a 10.3 percent advance in Denver. Fourteen cities reported greater price increases in the year ending July 2015 over the year ending June 2015.
Compared with their peak in the summer of 2006, home prices on both 10-city and 20-city indexes remain down about 11% to 13%.
On Monday, the National Association of Realtors released a separate report showing that pending home sales pulled back by 1.4 percent in August after climbing by 0.5 percent in July. That is likely pricing many would-be buyers out of the market. “The S&P/Case Shiller National Home Price Index has risen at a 4% or higher annual rate since September 2012, well ahead of inflation”. The S&P/Case-Shiller index is based on a three-month average, which means the July figure was influenced by transactions in June and May. They slid almost 5 percent in August from July’s eight-year high to the lowest level since April, the National Association of Realtors said last week. “Most of the strength is focused on states west of the Mississippi”.
Blitzer said that the improving housing sector was a major contributor to a gross-domestic-product growth rate of 3.9 percent in the second quarter.
“The recent trend in Case-Shiller prices has been flat-to-down, but we very much doubt this accurately reflects what’s really happening in the existing homes market, where sales have jumped sharply this year”, said Ian Shepherdson of Pantheon Macroeconomics.