Even as mortgage rates continue to rise, home prices have reached the highest level ever recorded in the S&P CoreLogic Case-Shiller U.S. National Home Price Index.
The three-month running average to June shows prices nationwide rising 5.4% from June 2023, according to data released on Tuesday. Although the index hit a record high, the annual gain was still down from May’s 5.9% gain.
The index’s 10-city composite index grew at an annual rate of 7.4%, down from 7.8% last month. The 20-city composite index rose 6.5% year-on-year, down from 6.9% in May.
Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said: “While both housing and inflation have slowed, the gap between the two is larger than historical normal and our national index averages are The consumer price index was 2.8% higher. “That’s a full percentage point higher than the 50-year average. Before accounting for inflation, home prices have increased by more than 1,100% since 1974, but after accounting for inflation, home prices have increased by more than 1,100%. more than doubled (111%).
Among the 20 cities, New York had the highest annual increase, with home prices rising 9% in June, followed by San Diego and Las Vegas, with annual increases of 8.7% and 8.5% respectively. Portland, Oregon’s annual growth rate in June was only 0.8%, the smallest increase among the top cities.
As housing affordability has been a major topic this election cycle, this month’s report also breaks down home values by price tier, dividing each city’s market into three tiers. Looking only at large markets over the past five years, we found that the low-price segment in 75% of the covered markets grew faster than the overall market.
“For example, Atlanta’s low-rise market is growing 18 percent faster than mid-rise and high-rise housing,” Luke wrote in the release.
“New York’s lower-tier cities had the best five-year performance, nearly 20 percent higher than the New York region as a whole,” he continued. “New York also had the largest difference between low- and high-end home prices. In contrast, San Diego had the largest increase in high-rise residential prices over the past five years. The biggest appreciation.”
Prices across the San Diego market have increased 72% over the past five years, but prices have increased 79% at the high end and 63% at the low end.
The price increases come despite mortgage rates rising sharply from April to June, the index’s average period. Typically when interest rates rise, prices cool.
According to Mortgage News Daily, the average 30-year fixed-rate rate started in April just under 7% before soaring to 7.5% by the end of the month. Interest rates remained above 7% before falling back below that level in July. The 30-year fixed rate is currently around 6.5%.
“Mortgage rates have fallen since June, but there is evidence that even if rates do fall, they won’t be enough to bring buyers back into the market,” said Lisa Sturtevant, chief economist at Bright MLS. “Some buyers are waiting on home prices. — and not just interest rates — falling,”
Although home prices should fall month by month as we enter autumn, due to seasonal factors and increased market inventory, home prices are unlikely to fall significantly and are expected to remain higher than last fall.
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