Eseandre Mordi
● According to a recent report from The Kobeissi Letter, U.S. home prices finally caught a break in August after five straight months of declines. The S&P CoreLogic Case-Shiller 20-City Index showed prices rose 0.19% from July, beating the expected 0.10% drop and hinting at some stability.
● Year-over-year, prices are up 1.58% — the weakest annual growth since July 2023. New York (+6.1%), Chicago (+5.9%), and Cleveland (+4.7%) led the pack, but the overall picture isn't exactly rosy.
● Here's the kicker: when you factor in inflation, real home prices actually fell for the fourth month running. That means homeowners are losing purchasing power despite nominal gains on paper.
● The culprits? Sky-high mortgage rates, limited inventory, and rock-bottom affordability have basically frozen the market. Buyers and sellers are sitting on their hands, transaction volumes are down, and smaller lenders and builders are feeling the squeeze.
● Some economists think tax breaks or lower interest rates could help, but policymakers are wary of stoking more inflation. The stagnation is also spreading to construction, home furnishings, and mortgage securities.
Eseandre Mordi
