U.S. home price growth remained largely flat in June, according to a report released Tuesday, a further indication that the housing market is holding steady after years of turbulence.
The S&P/Case-Shiller Home Price Index, covering the entire nation, rose 4.5% in the 12 months ended in June, slightly greater than a 4.4% increase in May.
The 10-city index saw a slightly lower gain of 4.6% from a year earlier, compared with a 4.7% increase in May. The 20-city index gained 5% year-over-year, compared with a 4.9% increase in May.
Economists surveyed by The Wall Street Journal expected a 5% increase to the 20-city index.
This month’s Case-Shiller numbers are being closely watched after Monday’s stock market plunge has some investors eyeing real estate as a more stable investment. Another important indicator, sales of new homes in July, is also set to be released Tuesday.
But economists cautioned that the report reflects the state of the housing market a couple of months ago. It doesn’t take into account whether there will be any impact from the latest market news.
“If you’re uncertain about the economy you’re not going to take your money and buy a house,” said Steve Blitz, chief economist at ITG Investment Research. “It’s just a question mark that we didn’t have before.”
David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, pointed to a major stock market drop as one potential factor that could cool off the housing market in the coming months.
“A stock market correction is unlikely to do much damage to the housing market,” he said. “A full-blown bear market dropping more than 20% could present some difficulties for housing and other economic sectors.”
Month-over-month home price gains were modest, according to the report. Not seasonally adjusted, the U.S. Index rose 1% from May to June. The 10-city and 20-city indexes saw a 0.9% and 1% change over the month respectively.