Home sales are rebounding, despite median prices at record highs and mortgage rates notably higher, and that demand-pull is evident in August's Case-Shiller Home Price data (the latest data released today from this heavily lagged series). The data was slightly mixed however with the 20-City Composite Price Index growth decelerating from +20.02% YoY in July to 'only' +19.66% YoY in August; while the National Home Price Index growth accelerated from +19.75% YoY to +19.85% YoY in August...
It is worth noting that the 20-City Composite Price Index has not seen prices fall on a MoM basis since March 2012...
Phoenix, San Diego, and Tampa reported the highest year-over-year gains among the 20 cities in August.
Phoenix led the way with a 33.3% year-over-year price increase, followed by San Diego with a 26.2% increase and Tampa with a 25.9% increase.
Eight of the 20 cities reported higher price increases in the year ending August 2021 versus the year ending July 2021.
“Persistently strong demand among traditional homebuyers has been amplified by an increase in demand among investors this summer,” said Selma Hepp, deputy chief economist at CoreLogic.
“While strong home price appreciation rates are narrowing the pool of buyers, particularly first-time buyers, the depth of the supply and demand imbalance and robust demand among higher-income earners will continue to push prices higher.”
All of which explains why (according to UMich sentiment surveys), homebuyer sentiment is firmly at record lows driven by price:
But, what is missing from that 'survey' is the elephant in the room... Wall Street investors. As we noted previously, how is it that homes are both unaffordable and soaring in price?
As with so many other things that shouldn’t be, the answer can be found at the intersection of Wall Street and easy money.