Case-Shiller shows home price growth matches record high — what this means for homeowners
Home prices surge at nearly 20% annually
Home prices are rising at nearly 20% annually, according to the latest Case-Shiller data.
Home price growth continued its upward trend in August, posting a 19.8% annual gain, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. This increase matched the record home price gain set in July.
"The U.S. housing market showed continuing strength in August 2021," Craig Lazzara, S&P DJI managing director and global head of index investment strategy, said. "Every one of our city and composite indices stands at its all-time high, and year-over-year price growth continues to be very strong, although moderating somewhat from last month’s levels."
The 10-City Composite, which measures home prices from the top 10 U.S. cities, posted an 18.6% annual increase, down from July’s 19.2%. The 20-City Composite, measuring the top 20 cities, increased 19.7% annually, down from 20% the previous month.
Homeowners can take advantage of high home prices to refinance their home, or even get a cash-out refinance, at today’s historically low mortgage rates. Visit Credible to find your personalized rate in minutes without affecting your credit score.
Home prices continue to surge but demand weakens
Home prices are up significantly in some key cities. For example, Phoenix saw home prices appreciate 33.3% annually, while in San Diego and Tampa, home prices jumped 26.2% and 25.9%, respectively. Additionally, eight of the top 20 cities saw higher annual home price increases in August than in July, the data showed.
On a monthly basis, national home prices increased 1.7% from July to August, while the 10-City and 20-City composites jumped 0.8% and 0.9%, respectively. But despite these increases, economists say growth is slowing.
"The U.S. S&P CoreLogic Case-Shiller Index showed a turning point in August, up 19.8%, the same as the month before," CoreLogic Deputy Chief Economist Selma Hepp said. "And while demand remains strong and buyers are still generally paying more for homes than asking price, the slowing acceleration in home prices suggests that buyer fatigue is setting in, particularly among higher-priced homes where the acceleration in price growth from the previous month has been larger compared to low tier homes."
If you are a homeowner, you can benefit from increased home values through a cash-out refinance. Visit Credible to compare multiple lenders at once and choose the one that has the best rate for you.
FANNIE MAE AGAIN LOWERS ECONOMIC GROWTH OUTLOOK: WHAT IT MEANS FOR INTEREST RATES
What rising prices mean for homeowners
Many homeowners could benefit significantly from higher home values in today’s real estate market. Depending on their goals, such as saving money or making a profit, there are several options available to them. Here are a few:
Take money out of your home
With home values surging, homeowners can take advantage of their equity and pull money out of their home through a cash-out refinance. This money can then be put toward home renovation projects or used to consolidate other high-interest debt. Visit Credible to get prequalified in minutes.
Refinance to save money
Homeowners who own less than a 20% stake in their home have to pay for additional private mortgage insurance (PMI), which can add a few hundred dollars to your monthly mortgage payments, according to Freddie Mac. However, with home prices surging nearly 20% in the last year alone, even first-time buyers who purchased a home with a low down payment as early as last year may have enough equity stake to remove their mortgage insurance.
For homeowners with conventional home loans, or loans backed by Fannie Mae or Freddie Mac, removing PMI is as simple as contacting your lender or servicer. However, homeowners with FHA loans will need to refinance to remove their PMI payments.
If you are interested in refinancing your mortgage to lower your monthly costs, visit Credible to compare multiple lenders and rates. Homeowners who refinance now amid record low interest rates could potentially save hundreds on their monthly payments.
MBA ECONOMIST SAYS INFLATION NOT TRANSITORY: HERE’S WHAT THAT MEANS FOR INTEREST RATES
Make a profit through selling
Homeowners could also make a substantial profit by selling their home for much more than they bought it, even if they purchased it last year. In 2020, the median price of a typical home was $389,400, according to Statista. If a median-priced home's value increased 20% from last year, that would be an increase of more than $75,000. However, while a homeowner has an advantage in the seller's market, they then become a homebuyer in a housing market that's driven by strong demand.
If you are interested in refinancing your mortgage, contact Credible to speak to a home loan expert and get all of your questions answered.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.