Home prices in the United States hit a record high in June, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. Prices nationally were 5.4% higher than they were in June 2023, despite being a smaller annual gain compared to May’s 5.9% reading. The index’s 10-city composite rose 7.4% annually, down from 7.8% in the previous month.
The 20-city composite was 6.5% higher year over year, down from a 6.9% increase in May. New York saw the highest annual gain among the top 20 cities, with prices increasing 9% in June, followed by San Diego and Las Vegas with annual increases of 8.7% and 8.5%, respectively. Portland, Oregon saw just a 0.8% annual increase in June, the smallest gain of the top cities.
Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, noted in a release, “While both housing and inflation have slowed, the gap between the two is larger than historical norms, with our National Index averaging 2.8% more than the inflation rate. That is a full percentage point above the 50-year average.
U.S. home prices surge despite rates
Before accounting for inflation, home prices have risen over 1,100% since 1974, but have slightly more than doubled (111%) after accounting for inflation.”
The report also broke out home values by price tier, dividing each city’s market into three tiers. Looking just at large markets over the past five years, it found that 75% of the markets covered show low-price tiers rising faster than the overall market. The increase in prices came even as mortgage rates rose sharply from April through June, which is the period averaged on the index.
The average rate on the 30-year fixed started April just below 7% and then shot up to 7.5% by the end of the month, according to Mortgage News Daily. Rates stayed over 7% before falling back under that level in July. The 30-year fixed is now right around 6.5%.
Lisa Sturtevant, chief economist at Bright MLS, said, “Mortgage rates have fallen since June, but there is evidence that even the decline in rates has not been enough to bring buyers back into the market. Some buyers are waiting for home prices — and not just interest rates — to come down.”
While home prices should ease month to month going into the fall, due to seasonal factors and more inventory on the market, they are unlikely to drop significantly and are expected to still be higher than they were last fall.
- MortgageNewsDaily.”Slowing Home Price Gains Still Outstrip Inflation”.
- Yahoo.”US home prices hit a record high in June”.
- CNBC.”Home prices hit record high in June on S&P Case-Shiller Index”.