Real house prices decreased 1.3 percent between July 2019 and August 2019, according to the latest First American Real House Price Index (RHPI).
Year-over-year, real house prices declined 5.9 percent between August 2018 and August 2019, First American found.
Consequently, First American said consumer house-buying power increased 2.5 percent between July 2019 and August 2019, and increased 14.8 percent year over year.
“Since August 2018, mortgage rates decreased 0.93-percentage points and household income grew by 2.6 percent – both improving house-buying power and affordability,” First American Chief Economist Mark Fleming said in a release. “However, rising nominal house prices reduce affordability, and nominal house price appreciation grew by 8 percent compared with one year ago. Ultimately, this continual ‘tug-of-war’ between house-buying power and nominal house prices determines the fate of real house prices.”
According to the RHPI, real house prices are 18.6 percent less expensive than in January 2000.
“This year, through August, home buyers’ purchasing power has far outpaced the appreciation of the homes they are buying, so home buyers were in a better position in August, despite the increase in nominal house prices,” Fleming said.
During August, the five states with the greatest year-over-year decrease in the RHPI were New Mexico (-11.1 percent); California (-10.5 percent); North Dakota (-10.1 percent); Wyoming (-9.8 percent); and Colorado (-9.1 percent). There are no states with a year-over-year increase in the RHPI in August.
The five markets with the greatest year-over-year decrease in the RHPI in August were San Jose, Calif. (-15.8 percent); San Francisco (-12.4 percent); Portland, Ore. (-11.3 percent); Seattle (-10.7 percent); and Los Angeles (-10.4 percent).