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The big news this month: Home prices in June had barely inched up from a year ago, according to Tuesday morning’s S&P/Case-Shiller Home Price Indices. Actually, that was the big news last month, too, when we reported that the rise in home prices in May 2105 was pretty flat, too.
The Home Price Index, which covers the entire United States, rose 4.5% year over year in June; in May there was a 4.4% increase, thus a lowly 0.1% gain month over month.
The 10-city index, covering the urban giants from New York City to Los Angeles, reported similar results. That one rose 4.6% from the year before, compared with May’s 4.7% increase. The 20-city index, which includes smaller cities such as Phoenix, Denver, Tampa, and Detroit, rose 5% year over year; in May, it was a 4.9% increase.
Much of that lift came from the Midwest and West. “Denver is the only city with a double digit increase, and Phoenix and Detroit had the longest streaks of year-over-year increases,” according to the press release. “Phoenix reported a 4.1% in June 2015, the seventh consecutive year-over-year increase. Detroit recorded 5.7% in June 2015, the sixth consecutive year-over-year increase.”
The cities with the highest year-over-year gains were Denver, San Francisco, and Dallas: 10.2%, 9.5%, and 8.2%, respectively. It was Washington, DC, that saw the smallest year-over-year gains, five out of the previous six months.
Prices are not likely to fall, or at least not much. “Nationally, home prices continue to rise at a 4-5% annual rate, two to three times the rate of inflation,” according to David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
The FHFA House Price Index came out Tuesday morning, too, reporting a 1.2% rise in the second quarter—that makes 16 consecutive quarters that it has grown.
And that rise could get steeper. We may see more of a jump in August’s numbers. The selling season slows down, but the stock market’s wild ride may make investors turn, even more, toward real estate.
More fuel for the demand fire: Consumers are feeling pretty darn optimistic, according to the August 2015 Consumer Confidence Survey, released on Tuesday morning. The Conference Board Consumer Confidence Index rose to 101.5 in August from 91.0 in July. The Present Situation Index rose, too (104.0 in July to 115.1 in August), as did Expectations: 92.5 in August from 82.3 in July.
Consumers are “considerably more upbeat,” said Lynn Franco, director of Economic Indicators at the Conference Board, thanks in part to a “favorable appraisal of the labor market.”
Will those confident consumers get their hands on some property?
Some of real estate’s fate lies in the hands of the Fed. We’re all waiting with bated breath to discover if it goes forth with the planned rate increase, or forgo it in light of recent crazy stock market news.
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