Case-Shiller's latest report shows house price inflation slowed again in June, continuing its downtrend. [U]nderlying housing demand remains weak despite normal seasonal buying patterns, the report said, noting the erosion in housing wealth in real terms for the second straight month with home price gains lagging consumer price inflation.

The 20-city home price index declined 0.3 percent on the month in June, seasonally adjusted, and the unadjusted annual rate of increase eased to 2.1 percent from May's 2.8 percent. The consensus was 2.6 percent for the year-on-year figure in June.

The national unadjusted home price index showed a 0.1 percent gain in June from May, and a 1.9 percent annual increase down from +2.3 percent in May.

New York again reported the highest annual gain among the 20 cities with a 7.0 percent increase in June, followed by Chicago and Detroit with annual increases of 6.1 percent and 4.5 percent, respectively. Tampa posted the lowest return, falling 2.4 percent.

The ongoing decline in housing prices is good news for the anti-inflation fight, but the erosion of household wealth could further undermine consumer sentiment, highlighting the increased balance of risks to the U.S. economy.

Home prices are seen up 2.6 percent on year in June as housing price inflation continues to ebb, down from 2.8 percent in May.

The S&P Corelogic Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the nation. Composite indexes and regional indexes measure changes in existing home prices and are based on single-family home resales. Condominiums and co-ops are excluded as is new construction. Note that forecasters, in line with recommendations from Standard & Poor's questioning the accuracy of seasonal adjustments, track both seasonally adjusted and not seasonally adjusted monthly data for this indicator.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can dampen housing starts. Changes in home values, and the ability to draw upon expanding lines of home equity loans, play key roles in consumer spending and in consumer financial health.

Beginning with the onset of the subprime credit crunch in mid-2007 and with it a downturn in home prices, the ability of borrowers to refinance their debt into affordable fixed rate mortgages was sharply constrained. This in turn limited aggregate consumer spending and contributed to the depth of the Great Recession. From their peak in late 2006 and early 2007 to their nadir in mid-2012, Case-Shiller's home price indexes fell nearly 50 percent. The subsequent recovery proved slow but steady with the indexes finally surpassing their prior highs in early 2018.