Case-Shiller and FHFA both report annual gains, with wide gaps across regions
Two major home price reports released on Tuesday, both showing continued gains in August but both falling short of keeping up with inflation.
Home prices rose in August, with the S&P Cotality Case-Shiller US National Home Price Index up 2.1% from a year earlier and the Federal Housing Finance Agency (FHFA) House Price Index up 2.4%, according to reports released Tuesday.
The Case-Shiller gain was up from 1.9% in July, while the FHFA index rose 0.3% from July after that month's increase was revised down to 0.2%.
Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices (S&P DJI), said even with the gains, home prices are still trailing inflation.
"US home prices declined in real terms for the 15th consecutive month in August 2026, though the gap narrowed as nominal home price growth strengthened," Kaufman said.
National gains trail inflation
Inflation of 3.4% in August ran about 1.3 percentage points above the 2.1% home price gain, S&P DJI said. The Case-Shiller 10-City Composite rose 3.6% from a year earlier, up from 3.4% in July, and the 20-City Composite rose 2.7%, up from 2.5%.
Seasonal patterns pulled down the Case-Shiller monthly readings. Before adjustment, the national index fell 0.2% in August, and the 10-City and 20-City composites each fell 0.4%, but after adjustment they rose 0.3%, 0.4% and 0.3%, respectively.
"The divergence suggests that the typical post-summer slowdown is obscuring some underlying strength in home prices," Kaufman said. "Affordability, however, remains challenging. With inflation at 3.4%, Brent crude near $100 per barrel and mortgage rates in the mid-to-high 6% range, households continue to face elevated costs alongside persistently high home prices."
FHFA's index uses seasonally adjusted, purchase-only data from Fannie Mae and Freddie Mac, so its 0.3% monthly gain lines up more closely with the adjusted Case-Shiller readings.
Rates have climbed since August, with Freddie Mac's 30-year average at 7.32% last Thursday.
Regional gaps stay wide
Chicago led all metros for the sixth consecutive month with a 6.7% annual gain, followed by New York at 6.2% and Cleveland at 4.3%. Seattle recorded the largest annual decline for the third consecutive month, at 2.0%, followed by Las Vegas at 1.3% and Denver at 0.8%.
FHFA's census division data showed a similar spread. Monthly changes ranged from a 0.8% decline in New England to a 2.1% gain in the East South Central division, and 12-month changes ranged from 0.5% in the Mountain division to 4.4% in the East North Central division.
S&P DJI did not publish an August figure for Detroit because of transaction delays at the recording office in Wayne County, Michigan.
Odeta Kushi, vice president and deputy chief economist at First American, has watched the same regional split play out. Dallas and Chicago both appear in the Case-Shiller results, on opposite sides of zero.
"It's not a house price crash, right? It's been a gradual decline," Kushi told Mortgage Professional America earlier this month. "We've seen in places like Dallas, there's been year-over-year price declines. A lot of the formerly pandemic darling markets are now seeing some house price moderation or declines. But then in Chicago, a top-performing market, there's 5 to 6% house price growth. But those price declines do help to bring affordability into better balance, even with higher or elevated rates."
Glen Weinberg, chief operating officer and partner at Fairview Commercial Lending, sees the same squeeze. He expects it to last for years.
"Prices aren't wholesale declining, but because of inflation, you end up in the stagflation scenario where everything's just kind of stagnating," Weinberg told Mortgage Professional America.
The next FHFA report is due Nov. 24 and will include September data. S&P DJI publishes Case-Shiller on the last Tuesday of each month, which is also Nov. 24.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
