Why home prices and new home sales aren’t as hot as today’s reports show

Today, the S&P Cotality Case-Shiller Home Price Index and new home sales data beat estimates, but both need context. First, I think the notion that we had the most sellers ever recorded in history, with the lowest demand in the last 12 months, should be viewed skeptically. Home prices were actually improving on a year-over-year basis recently, which should make you question anyone who has been saying this. Also, even though new home sales data beat estimates while mortgage rates were elevated, you should view it through the lens of a rate-buydown marketplace. The new home sales sector has been living off rate buydowns from builders, whereas the existing home sales market hasn’t. So, let’s look at both reports and try to explain what is happening. Home prices From Case Shiller: The S&P Cotality Case-Shiller U.S. National Home Price NSA Index posted a 2.1% annual gain for August 2026, up from a 1.9% rise in the previous month. U.S. home values fell in real terms for the 15th consecutive month, as August’s 3.4% inflation ran roughly 1.3 percentage points above the 2.1% home price gain. A nearly 9-percentage-point gap separated August’s strongest market (Chicago +6.7% YoY) and ...