- The S&P CoreLogic Case-Shiller National Composite Index recorded a 13.0% gain in August from a year ago, down from 15.6% in July.
- The S&P CoreLogic Case-Shiller 20-City home price index rose 13.1% in August from a year ago, down from 16.0% in July.
- Higher mortgage rates and deteriorating affordability will continue to weigh on housing demand.
Annual house price appreciation in August, as measured by the S&P CoreLogic Case-Shiller National Composite Index decelerated to 13.0%, the slowest pace since February 2021, from 15.6% in July. The S&P CoreLogic Case-Shiller 20-City Index recorded a 13.1% gain in August versus August 2021, down from 16.0% in July. The national index declined 0.9% (after seasonal adjustments) in August from July, following a 0.5% decline in July. On a month-over-month basis, the 20-City index fell 1.3% (after seasonal adjustments) in August, following a 0.7% decline in July. The sharpest monthly declines from the prior month were in San Diego (2.5%), Seattle (2.9%), and San Francisco (3.7%).
House price growth decelerated in all 20 cities tracked by the index. Fourteen of the 20 cities reported double-digit annual price increases in August, down from 18 in July. Miami (28.6%), Tampa (28.0%), and Charlotte (21.3%) reported the highest annual gains while Minneapolis (7.6%), Washington DC (7.4%), and San Francisco (5.6%) reported the weakest annual gains.
The housing market slowdown continued in August as rising mortgage rates and deteriorating affordability weighed on demand. The S&P CoreLogic Case-Shiller National Composite Index is calculated using a three-month moving average and the data are published with a two-month lag.
Mortgage rates have continued their upward trajectory in recent months. The average 30-year fixed mortgage rate has risen sharply in 2022, increasing from around 3% in January to over 7% last week. Mortgage rates are set to rise further in 2022 and 2023 as the Fed continues its unwavering fight against stubborn inflation by raising the fed funds rate further and continuing quantitative tightening. PNC Economics expects negative house price growth in 2023.
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