While the pace of U.S. home-price growth lagged the rate of inflation for the third month in a row in July, Chicago was one of the nation\u2019s top performers, reflecting a reversal of fortune from the pandemic years, when Midwest markets were overshadowed by the blistering run-up in home prices seen in the Sun Belt, S&P Dow Jones Indices said.\u00a0<\/p>\n
\u201cImportantly, this rotation seems rooted in fundamentals: The markets now on top \u2014 like Chicago or Cleveland \u2014 tend to be more affordable and supported by steady local economies, whereas the ones stumbling \u2014 like San Francisco or Phoenix \u2014 are grappling with stretched affordability and the comedown from speculative fervor,\u201d said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones.\u00a0<\/p>\n
The S&P Cotality<\/a> Case-Shiller U.S. National Home Price Index<\/a> rose just 1.7% year over year in July, down from the 1.9% annual gain measured in June and below the 2.7% rise in consumer prices. In fact, S&P Dow Jones noted, the 1.7% gain is one of the weakest annual increases in the last 10 years. Month over month<\/a>, the index slid 0.2%. \u00a0<\/p>\n \u201cU.S. home values have essentially stagnated after inflation, marking the third straight month of real housing wealth decline for homeowners,\u201d Godec said. \u201cThis reversal is striking: During the pandemic boom, home prices were climbing far faster than inflation, rapidly boosting homeowners\u2019 real equity. Now, the situation has flipped \u2014 over the last year, owning a home yielded a modest nominal gain, but an inflation-adjusted loss.\u201d\u00a0<\/p>\n In Chicago, however, home appreciation remained healthy in July, with prices rising 6.23% year over year and 0.65% month over month. The annual gain is the second highest among the 20 cities tracked in the index, just behind New York, where prices rose 6.43% annually, and ahead of Cleveland, where they rose 4.46%.\u00a0<\/p>\n