Home values go negative in August on regional weakness

Home
price
growth
went
negative
on
a
month-to-month
basis
in
August,
due
to
weakening
conditions
in
the
West
and
South,
the
latest
Corelogic
S&P
Case-Shiller
Home
Price
Index
report
stated.

However,
the
Federal
Housing
Finance
Agency
House
Price
Index,
whose
next
release
will
be
used
to
determine
the
2025
conforming
loan
limits,
increased
by
0.3%
in
August
over
July.

“Despite
much-needed
optimism,
brought
about
by
a
sharp
decline
in
mortgage
rates
in
August,
the
boost
was
short-lived
and
not
enough
to
markedly
renew
homebuyer
interest,”
a
commentary
from
Corelogic
Chief
Economist
Selma
Hepp
said. “As
a
result,
home
prices
continued
to
weaken
relative
to
their
seasonal
trend.
and
year-over-
year
gains
took
a
step
back.”

Prices
were
down
in
August


versus
July
by
0.13%,
not
adjusted
for
seasonality.
This
compared
with


an
increase
of
0.4%
one
year
ago.

In
the
pre-pandemic
years
of
2015
to
2019,
the
average
monthly
increase
in
August
was
0.28%.

On
an
annual
basis,
while
prices
rose
4.25%
over
August
2023,
values
were
down
from
5%
in
July,
and
pale
the
6.5%
gains
in
February
and
March.

“The
tale
of
two
regions
reflects
significant
affordability
challenges
in
the
West
and
South,
where
home
price
increases
in
recent
years
and
high
mortgage
rates
priced
out
many
potential
buyers,”
Hepp
said. “The
Northeast
and
Midwest
continue
to
benefit
from
relative
affordability
and
less
cumulative
increase
in
prices
over
the
last
few
years,
but
also
more
limited
for-sale
inventory.”

Non-mortgage
costs
of
homeownership
particularly
impacted
the
South,
and
especially
Florida,
as
rising
insurance,
condo
reserves
and
taxes
affected
fixed-income
households,
Hepp
said.

On
the
FHFA
HPI,
the
0.3%
gain
compared
with
a
revised
0.2%
between
June
and
July.

The
annual
price
index
rose
4.2%
for
August.

“House
price
appreciation
in
the
United
States
remained
modest
for
the
sixth
consecutive
month,”
said
Anju
Vajja,
deputy
director
of
FHFA’s
Division
of
Research
and
Statistics
in
a
press
release. “The
slow
but
continued
house
price
growth
and
the
effect
of
locked-in
interest
rates
led
to
persistent
housing
affordability
challenges.”

Prices
in
both
the
Pacific
and
South
Atlantic
regions
gained
0.1%
between
July
and
August,
but
they
were
not
the
weakest
regions.
Prices
went
down
by
0.1%
in
both
the
New
England
and
East
North
Central
regions.

On
the
other
hand,
they
increased
0.9%
in
the
West
North
Central
states
and
by
0.8%
in
the
West
South
Central
and
East
South
Central
regions.

First
American
Data
and
Analytics’
September
Real
House
Price
Index
reported
a
decrease
of
3.1%
from
August
and
a
9.2%
drop
from
one
year
ago.

This
index
includes
adjustments
for
such
items
as
inflation.
September’s
year-over-year
increase
in
affordability
was
attributed
to
a
3.1%
rise
in
nominal
household
income
and
lower
mortgage
rates,
said
First
American
Chief
Economist
Mark
Fleming,
in
a
press
release.

“Nominal
house
price
appreciation
slowed
nationally
for
the
ninth
consecutive
month
in
September,
but
still
reached
another
record
high,”
Fleming
said. “Yet,
the
increase
in
nominal
house
prices
was
not
enough
to
offset
the
improved
affordability
from
lower
mortgage
rates
and
higher
household
income.”