Slowly but steadily, home prices in South Florida continued to rise in July, and once again performed above the national average, according to the S&P CoreLogic Case-Shiller Index.
Prices for homes in Miami-Dade, Broward and Palm Beach counties were up 7 percent in July year-over-year and up 0.4 percent month-over-month over June’s result, the closely watched economic measure released on Tuesday found.
The South Florida housing market has cooled down considerably this year, mostly because a strong dollar and some weak global economies leading to a fall in the number of foreign buyers. In August, home sales in Miami-Dade fell 3.3 percent but recovered from a nearly 21 percent dropoff in July, according to the monthly Realtors’ report. The Realtors report released last week showed faster growth in area home prices in August, perhaps forecasting a better showing in next month’s Case-Shiller Index.
Yet, although climbing steadily, South Florida home prices are growing at their slowest rate since the market began its recovery in 2012.
Nationally and locally, the latest report is further evidence that prices are being pushed higher by the limited inventory of homes on the market. That hurts sales of both new and existing homes, despite historically low mortgage rates. The Commerce Department reported Monday that new home sales fell nationally 7.6 percent in August.
“With inventory still very tight, the pressure on home prices is all to the upside,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.
That’s leading to an affordability problem, locally and nationally. “Incomes are so far behind that they need to do a lot of catching up before homes become more affordable, especially for those at the bottom of the income distribution and in the country’s most expensive markets,” said Zillow Chief Economist Svenja Gudell.
The metro areas with the hottest home prices in July, according to the Case-Shiller report, were Portland (up 12.4 percent), Seattle (up 11.2 percent), Denver (up 9.4 percent), Dallas (up 8.3 percent) and Tampa (up 7.8 percent). Home prices were up 5.1 percent nationwide.
“Both the housing sector and the economy continue to expand with home prices continuing to rise at about a 5 percent annual rate,” said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. Noting that eight of the 20 metro areas in the index, including Miami, had yearly price increases of more than 6 percent, a pace that is “probably not sustainable over the long term,” he added: “There is no reason to fear that another massive collapse is around the corner.”
Nationally, the 20-city price index plunged after the housing bubble started to burst in 2006, falling by more than a third before hitting bottom in March 2012. Since then, prices are up 42.4 percent. But they remain 7.6 percent below the peak reached in July 2006.
The Associated Press contributed to this report.