The housing market continued to demonstrate relative strength amid a weakened U.S. economy, as home-price appreciation rose again in June.
The S&P CoreLogic Case-Shiller 20-city price index posted a 3.5% year-over-year gain in June, down slightly from 3.6% the previous month, while the separate national index showed a 4.3% increase in home prices year over year.
Although unchanged from the rate of price growth in May, home prices continue to defy the current economic downturn as the housing market rides out the storm.
“Housing prices were stable in June,” said S&P Dow Jones Managing Director Craig J. Lazzara in the report. “More data will be required to understand whether the market resumes its previous path of accelerating prices, continues to decelerate, or remains stable. That said, it’s important to bear in mind that deceleration is quite different from an environment in which prices actually fall.”
Phoenix, Seattle and Tampa continued to report the highest year-over-year gains in June. Phoenix led the way with a 9% year-over-year price increase, followed by Seattle with a 6.5% increase and Tampa with a 5.9% increase.
In Chicago, however, prices were up only 0.6% in June from the previous year, far less than the national average of 3.5%.
While low interest rates are driving demand and record-low inventory propelling price growth, the overall strength of the housing market points to the unevenness of this recession and the widening gap between the haves and the have nots.
“The strength of the Case-Shiller index reflects an ideal confluence of demographic and home buying fundamentals which keep driving home prices higher,” said CoreLogic Deputy Chief Economist Selma Hepp in a statement. “On one hand, there’s a very limited supply of homes. And on the other, a strong millennial demand driven by record-low mortgage rates and a need for more space. But, the housing market also highlights the tale of two income stratums. In one group, there are those who lost their income and are relying on forbearance programs. In the other group, which fared better, individuals are able to purchase a home.”