U.S. home prices data for the month of July is set to release tomorrow. According to a Barclays research report, the S&P/Case Shiller house price index is likely to have risen 0.1 percent month-on-month and 3.6 percent year-on-year in July. Tight inventories and an increase in house demand, as seen in recent solid home sales volumes, are expected to underpin home prices in the months ahead.
However, momentum in the metropolitan areas are expected to be slower given recent evidence of increased demand for living in suburban areas. Given the S&P survey’s focus in the 20 largest metro areas, this index is likely to underperform other surveys such as CoreLogic and the FHFA. The latter has risen 1 percent for two straight months accelerating to 6.5 percent year-on-year.
“The recent strong rises in demand for homes, especially single family homes, appears to be supporting home prices outside the 20 large metropolitan areas covered by the S&P/Case Shiller CoreLogic 20 City average index”, added Barclays.
