EDITOR'S NOTE: Recent US home price data has shown us that American consumers looking to buy homes are now exercising their purchasing power via choice and restraint. The Case-Shiller National home price index fell to 18% YoY in June, while the median price for existing home sales decreased to 10.55% YoY in July. Experts warn that home prices can continue to slide, possibly down 20% by next year if we fall into a recession. Moody’s Analytics estimated that around 183 of the nation’s largest housing markets are overvalued by over 25%. So, if a recession does hit, might it mean that these homes can plummet by, say, 20%? In other words, is America on the cusp of another housing collapse?
US home price growth is decelerating as The Federal Reserve let’s some of the air out of the monetary tires.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported an 18.0% annual gain in June, down from 19.9% in the previous month. The 10-City Composite annual increase came in at 17.4%, down from 19.1% in the previous month. The 20-City Composite posted an 18.6% year-over-year gain, down from 20.5% in the previous month.
Tampa, Miami, and Dallas reported the highest year-over-year gains among the 20 cities in June. Tampa led the way with a 35.0% year-over-year price increase, followed by Miami in second with a 33.0% increase, and Dallas in third with a 28.2% increase. Only one of the 20 cities reported higher price increases in the year ending June 2022 versus the year ending May 2022.
While the Case-Shiller National home price index slowed to 18% YoY in June, the median price for existing home sales slowed to 10.55% YoY in July as The Fed’s M2 Money growth YoY slowed to 5.28% and Freddie Mac’s 30yr mortgage rate rose to 5.3%.
Source: Confounded Interest
Bear in mind that Case-Shiller is lagged compared to the existing home sales numbers. Much like the New York Yankees manager picking the hottest batter in June to start in September. The Yankees traded poor-hitting Joey Gallo to the LA Dodgers to supplement poor-hitting Cody Bellinger.
In any case, as of June 2022, the 20 metro areas covered by Case-Shiller all grew in price in double digits with alligator-infested Tampa and Miami FL in the 30% rate, rattlesnake-infested Dallas is in 3rd place at 28.2%. Phoenix AZ, where I used to live, slowed to 26.6%. Yes, I had rattlesnakes on my property (a nest of Mohave Rattlers) and a large Diamond-backed Rattler behind my house).
Source: Confounded Interest
Let’s see how housing holds up with more Fed monetary tightening. Fed Chair Powell is predicting “pain.”
Source: Confounded Interest
Originally published on Confounded Interest.
