by Calculated Risk on 10/26/2021 09:12:00 AM
S&P/Case-Shiller released the monthly Home Price Indices for August (“August” is a 3 month average of June, July and August prices).
This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.
divisions, reported a 19.8% annual gain in August, remaining the same as the previous month. The 10-
City Composite annual increase came in at 18.6%, down from 19.2% in the previous month. The 20-
City Composite posted a 19.7% year-over-year gain, down from 20.0% in the previous month.
Phoenix, San Diego, and Tampa reported the highest year-over-year gains among the 20 cities in
August. Phoenix led the way with a 33.3% year-over-year price increase, followed by San Diego with a
26.2% increase and Tampa with a 25.9% increase. Eight of the 20 cities reported higher price
increases in the year ending August 2021 versus the year ending July 2021.
Before seasonal adjustment, the U.S. National Index posted a 1.2% month-over-month increase in
August, while the 10-City and 20-City Composites both posted increases of 0.8% and 0.9%, respectively.
After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.4%, and
the 10-City and 20-City Composites both posted increases of 0.9% and 1.2%, respectively. In August,
all 20 cities reported increases before and after seasonal adjustments.
“The U.S. housing market showed continuing strength in August 2021,” says Craig J. Lazzara,
Managing Director and Global Head of Index Investment Strategy at S&P DJI. Every one of our city and
composite indices stands at its all-time high, and year-over-year price growth continues to be very
strong, although moderating somewhat from last month’s levels.
“In August 2021, the National Composite Index rose 19.84% from year-ago levels, marginally ahead of
July’s 19.75% increase. This slowing acceleration was also evident in our 10- and 20-City Composites,
which rose 18.6% and 19.7% respectively, modestly less than their rates of gain in July. Price gains
were once again broadly distributed, as all 20 cities rose, although in most cases at a slower rate than
had been the case a month ago.
“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.
More data will be required to understand whether this demand surge represents an acceleration of
purchases that would have occurred anyway over the next several years, or reflects a secular change
in locational preferences. August’s data are consistent with either explanation. August data also
suggest that the growth in housing prices, while still very strong, may be beginning to decelerate.
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 0.9% in August (SA).
The Composite 20 index is up 1.2% (SA) in August.
The National index is 45% above the bubble peak (SA), and up 1.4% (SA) in August. The National index is up 96% from the post-bubble low set in February 2012 (SA).
The Composite 10 SA is up 18.6% compared to July 2020. The Composite 20 SA is up 19.7% year-over-year.
The National index SA is up 19.8% year-over-year.
Price increases were slightly below expectations. I’ll have more later.