Home Prices Heat Up

Data released today shows annual home price gains were stagnant in June but continue heating up in the short term, with month-over-month prices rising.

Year-over-year, prices remained unchanged after slipping 0.4% the prior month, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index.

Prices were up 0.9% month-over-month before seasonal adjustment and 0.7% after. This is the fifth consecutive month of increases.

Home prices are now at all-time highs in half the cities analyzed, and the National Composite sits just 0.2% below its all-time high from last year.

Craig J. Lazzara, managing director at S&P DJI, noted that regional differences remain “striking.”

The West Coast hubs that saw a huge migration during the pandemic performed the worst (-5.9%).

The Midwest (+2.8%) again ranked first for growth after unseating the Southeast, but this month the Northeast swooped into second place (+1.6%). Strong jobs markets and relative affordability make the Northeast and Mid-Atlantic attractive to cost-sensitive buyers, pulling them away from pricey areas that were hot in the last few years.

“With 2023 half over, the National Composite has risen 4.7%, which is slightly above the median full calendar year increase in more than 35 years of data,” Lazzara said.

“We recognize that the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, but the breadth and strength of this month’s report are consistent with an optimistic view of future results.” 

Looking at cities, Chicago, Cleveland, and New York once again saw the biggest gains.

The latest Federal Housing Finance Agency House Price Index shows the same trends, with June prices up 0.3% from May. 

Quarter-over-quarter, prices rose 3% and are up 1.7% from Q1 2023.

“U.S. house prices appreciated at a slightly higher rate in the second quarter amid low inventory,” said Dr. Anju Vajja, Principal Associate Director in FHFA’s Division of Research and Statistics. “While prices in a number of western states continued to decline year-over-year, house prices rose in all states quarter-over-quarter.”​

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