Your home may be worth more on paper than it was a year ago and still be buying you less. That is what the newest national price report shows, and where you live decides which side of the story you are on.
The S&P Cotality Case-Shiller index, released October 27, shows national home prices up 2.1% in August from a year earlier. That is a step up from 1.9% in July.
The full release is posted by S&P Dow Jones Indices.
Prices Rose 2.1%, But Inflation Ran At 3.4%
Here is the catch. Consumer prices rose 3.4% over the same stretch, so home prices fell in real terms for the 15th straight month.
Put numbers on a $400,000 house. A 2.1% gain adds $8,400 to its value. A 3.4% jump in everyday prices takes about $13,600 off what that same money buys elsewhere.
The gap is not a disaster for anyone who plans to stay put. It does mean the house is not racing ahead of the rest of your bills.
Chicago Is Up 6.7% While Seattle Is Down 2.0%
The national number hides a wide split. Chicago posted the biggest annual gain among the 20 cities tracked, at 6.7%, and it has held the top spot for six months straight.
New York came in second at 6.2%, and Cleveland third at 4.3%.
On the other end, Seattle fell 2.0% and was the weakest city for the third month in a row. Las Vegas slid 1.3%, and Denver dropped 0.8%.
That is a swing of almost nine percentage points between the best and worst city. Two neighbors with the same size house can be living in two different housing markets.
The Bigger City Indexes Are Climbing Too
The 10-City Composite rose 3.6% from a year earlier, up from 3.4% in July. The 20-City Composite rose 2.7%, up from 2.5%.
Month to month, the picture looks different depending on how the numbers are counted. Without seasonal adjustment, the national index slipped 0.2% from July to August. After seasonal adjustment, it rose 0.3%.
Why The Monthly Numbers Point In Two Directions
Rebecca Kaufman, an associate director at S&P Dow Jones Indices, says the typical post-summer slowdown is covering up some underlying strength. Homes tend to sell for less in the fall than they do at the summer peak, and the adjusted figures take that out.
Still, she adds a note of caution: “Affordability, however, remains challenging.” She points to 3.4% inflation and oil prices near $100 a barrel.
In plain terms, prices are not collapsing, but the cost of living is eating away at what a gain feels like.
Fifteen Months Of Quietly Losing Ground
Real prices are the prices left after you subtract inflation. When they fall for 15 months in a row, it means a house is a little cheaper compared with the cost of everything else, even if the sticker price keeps edging up.
For buyers, that is a quiet gain. A home costs a bit less in terms of groceries, gas and insurance than it did a year and a half ago.
For sellers, it explains why a modest offer can feel like a letdown even when it is higher than last year’s.
What It Means If You Own A Home
If you are not selling, the headline is mostly good news. Your equity is probably holding or growing a little.
- Do not borrow against rising value without a plan. Equity on paper is not cash until you sell.
- Look up what homes like yours have sold for on your own street. That is more useful than any national number.
- Keep up with the maintenance. Fixing a roof or a leak is one of the few ways to protect value that is fully in your control.
What It Means If You Plan To Sell
If you live in a place where prices are slipping, the playbook is different from the cities where they are climbing.
Price the house to the sales that have actually closed, not to the listing down the street. Make the easy repairs, clean up the yard and consider a pre-sale inspection to head off late surprises.
In a softer market, a clean, well-kept house with a fair price will usually sell faster than a stale listing that keeps getting trimmed.
What It Means If You Hope To Buy
Buyers in cities where prices are flat or down have more room to negotiate. Ask for repairs or a closing-cost credit, and take your time.
In the cities where prices are climbing, waiting may cost more. Get your financing in order first so you can act quickly when the right house appears.
Either way, remember that you buy a house, not an average. Look at your own city and your own neighborhood before you decide.
How To Read Home Price News
When you see a headline about home prices, ask two quick questions. Is the number adjusted for inflation? And is it national or local?
A rise of 2.1% sounds like growth until inflation is running at 3.4%. A national figure also washes out the cities at the top and bottom.
The Case-Shiller report is a useful yardstick because it compares the same homes over time. Used alongside what is happening in your own zip code, it can help you decide whether this is the right season to sell, to buy or simply to hold tight.
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