A summer surge in home price gains has pushed San Diego back near the top of the nation’s hottest markets.

The San Diego metropolitan area’s annual home price increased 4.1 percent in August, according to a new S&P Case-Shiller Indices report. That was the fourth highest in the 20-city index, up from the bottom 10 where it had been for a year.

San Diego prices increased 1.7 percent from July to August, when seasonally adjusted, and was the biggest increase in the nation. It was followed by Seattle, at 1.5 percent, and Los Angeles and Miami, both up 1.2 percent.

Lack of homes for sale drove many determined buyers to push prices up throughout the summer, despite ever-growing mortgage rates.

“Home prices continue to rise even with higher mortgage rates because inventory is still low,” wrote Bright MLS chief economist Lisa Sturtevant. “However, affordability is becoming a bigger challenge.”

She wrote in an analysis that the market is particularly rough for first-time buyers and was not good for the overall economy as younger generations may miss out on traditional wealth building.

The Case-Shiller Indices track repeat sales of identical single-family houses — and are seasonally adjusted — as they turn over through the years. The San Diego County median resale single-family home price was $958,000 in August.

The index uses a three-month moving average and is delayed. More recent home sales data shows a slowdown in price gains, along with a big drop in sales.

Selma Hepp, CoreLogic chief economist, said the continued rise in interest rates is likely to slow after the summer’s price intensification.

“The recent mortgage rate surge to 8 percent and higher,” she wrote, “will have some impact on home prices this winter, in addition to the seasonal slowing expected at that time of year.”

In the last week of August, the interest rate for a 30-year, fixed-rate mortgage was 7.18 percent, said Freddie Mac, down from 5.55 percent the year before. The average rate this week was 7.88 percent, said Mortgage News Daily.

Chicago and New York were tied for the biggest annual increases at 5 percent, in the index, followed by Detroit at 4.8 percent. Several markets are down year-over-year, including San Francisco, down 2.5 percent, Phoenix, down 3.9 percent, and Las Vegas, down 4.9 percent. Prices were up 2.6 percent nationally.

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Annual price growth by metropolitan area

S&P/Case-Shiller Home Price Index, August 2023

Chicago: 5 percent

New York: 5 percent

Detroit: 4.8 percent

San Diego: 4.1 percent

Cleveland: 3.9 percent

Atlanta: 3.4 percent

Washington: 3.4 percent

Miami: 3.3 percent

Los Angeles: 3.2 percent

Boston: 3.1 percent

Charlotte: 3 percent

Minneapolis: 1.9 percent

Tampa: 0 percent

Denver: -0.6 percent

Portland: -1.5 percent

Seattle: -1.5 percent

Dallas: -1.7 percent

San Francisco: -2.5 percent

Phoenix: -3.9 percent

Las Vegas: -4.9 percent

NATIONAL: 2.6 percent

Source: SDuniontribune by Phillip Molnar