Homes continue to be more expensive than millennials and first-time buyers

The latest S&P CoreLogic Case-Shiller indexes of the S&P Dow Jones indices for July 2021 revealed that house prices continue to rise in the United States, with an annual gain of 19.7%, up from 18.7% the previous month .

“July 2021 is the fourth consecutive month in which the rate of house price growth has set a record,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI. “The national composite index marked its 14e consecutive month of price acceleration with a gain of 19.7% over the levels of the previous year, against 18.7% in June and 16.9% in May. This acceleration is also reflected in Composites 10 and 20 Cities (up 19.1% and 19.9% ​​respectively). The past few months have been extraordinary not only for the level of price gains, but also for the consistency of gains across the country. In July, all 20 cities rose, and 17 earned more in the 12 months ended July than they earned in the 12 months ended June. Home prices in 19 of our 20 cities are now hitting all-time highs, with the only outlier (Chicago) only 0.3% below its 2006 high. The National Composite, along with the 10 and 20 City, are also at their all-time highs. “

The compound annual increase of 10 cities was 19.1%, down from 18.5% the month before. The 20-City Composite posted a 19.9% ​​year-over-year gain, up from 19.1% the month before. Phoenix; San Diego, California; and Seattle recorded the highest year-over-year gains among the 20 cities in July, with Phoenix leading with an increase of 32.4%, followed by San Diego with 27.8% and Seattle with a 25.5% increase.

Seventeen of the 20 cities reported higher price increases in the year ending July 2021 compared to the year ending June 2021.

Before seasonal adjustment, the U.S. national index posted a 1.6% month-over-month increase in July, while the 10-city and 20-city composite indexes both posted increases of 1.3% and 1.5%, respectively. After a seasonal adjustment, the U.S. national index posted a 1.5% month-over-month increase, and the 10-City and 20-City composites both posted increases of 1.4% and 1.5%, respectively. In July, all 20 cities reported increases before and after seasonal adjustments.

“The 19.7% price gain in July for the National Composite is the highest result in over 30 years of S&P CoreLogic Case-Shiller data,” said Lazzara. “This month, New York joined Boston, Charlotte, Cleveland, Dallas, Denver and Seattle in posting their highest ever 12-month earnings. Price increases in all 20 cities were in the top quintile of historical performance; in 15 cities, the price gains were in the top five percent of historical performance. “

George Ratiu, director of economic research at, noted: “July also saw a growing wave of homes hitting the market as many homeowners decided to go ahead with delayed plans in the event of a loss. pandemic, which has boosted sales activity. The flow of new inventory to, which continued through August, gave buyers more options and helped dampen some of the surge in prices and frantic pace of early 2021. So as prices continue to rise, the growth rate has been moderating. This should moderate as we progress into the fall season and competition from the white-hot market softens towards more typical seasonal patterns. For many buyers, fall already offers better buying opportunities, with fewer competing offers, the return of the unexpected, and more announcements with price reductions.

Despite rising prices, affordability remains a hot topic for many millennials and first-time buyers, according to an ATTOM report, homes were less affordable in the third quarter of 2021 compared to previous years, with homes less affordable in 75% of counties surveyed, up from 56% in the same period in 2020, yet marking the highest level of unaffordability since 2008 due to the fact that wages have remained largely stagnant for years.

“We previously suggested that the strength of the US real estate market was in part due to a response to the COVID pandemic, as potential buyers move from city apartments to suburban homes. The July data is consistent with this assumption, ”Lazzara said. “This surge in demand may simply represent an acceleration in purchases that would have occurred in the next few years anyway. Alternatively, there may have been a secular shift in location preferences, leading to a permanent shift in the housing demand curve. It will take more time and data to analyze this question.

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