The numbers: The S&P CoreLogic Case-Shiller 20-city house price index fell 1.3% in August. This is the second consecutive monthly decline.
Year-over-year price appreciation rose 13.1%, but that reflects the stronger conditions in 2021. That’s down from 16% in July.
The rate of year price rises has sharply slowed since reaching a peak of 21.2% in April.
A broader measure of home prices, the national index, fell a seasonally adjusted 1.1% in August from July.
Key details: On a month-over-month basis, the biggest declines were on the West Coast,
Price gains have decelerated in every one of the 20 cities over the past year. The largest gains were in Miami, Tampa and Charlotte.
A separate report from the Federal Housing Finance Agency showed home prices falling 0.7% in August after a 0.6% drop in July. This is the first time since March 2011 that the FHFA index has seen two consecutive months of decline.
Big picture: The growth rate of housing prices peaked in the spring and has been declining ever since. Buyers are scarce now that mortgage rates are above 7% and inflation remains high. Economists are debating how far U.S. home prices could moderate or even decline. Home builder expectations for home sales over the next six months have fallen to their lowest level since 2012. The Mortgage Bankers Association is expecting a recession to hit in 2023.
What are they saying: “We expect the decline in home price growth to accelerate as sharply higher mortgage rates deliver a major blow to affordability and home sales,” said Nancy Vanden Houten, U.S. economist at Oxford Economics.