US home prices decline further in July

The S&P/Case-Shiller 20-City Home Price Index fell for the third month running in July. Home prices declined 0.2% m/m, below the consensus (+0.1%) expectations. The y/y rate of appreciation picked up slightly, to 5.0% (previous 4.9%). But the 3m/3m annualized rate fell significantly to -2.3% (previous -1.1%), suggesting further softness, especially compared with the double-digit readings of this metric at the start of 2015. 

Prices declined in 11 of the 20 metropolitan statistical areas (MSAs) and reported modest increases in the others. Before April, prices had been increasing in all 20 MSAs for six months running, so some of the current weakness could be payback after that strong performance. In addition, the S&P/Case Shiller survey has been more downbeat than other home price surveys recently including the FHFA and CoreLogic surveys. 

"This latest softness in the S&P/Case Shiller data will prove temporary, in our view, and we expect the housing market to remain in recovery mode. We see the continued solid employment growth and gradual pick-up in wage inflation as supporting housing demand and home appreciation", notes Barclays.