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Home prices hit another all-time high in July, although the rate of growth continued to slow.
The latest S&P CoreLogic Case-Shiller Index of home prices, released on Tuesday, showed nationwide price rose 5% in July from a year ago, down from a 5.5% annual gain the prior month.
On a seasonally adjusted basis, prices rose 0.18% nationally in July from June, and also rose on a monthly basis in all but two of the 20 large metro areas tracked by the index. San Francisco and Tampa, FL were the exceptions, though both markets saw prices higher than one year ago.
“Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index,” says Brian D. Luke, head of commodities, real & digital assets for S&P Global. “Overall, the indices continue to grow at a rate that exceeds long-run averages after accounting for inflation.”
The latest Case-Shiller release covers the months of May, June, and July, typically a seasonal peak period for home prices. Still, after mortgage rates peaked in May, the market began to swing in favor of buyers, with home sales activity falling, and time on market and price cuts rising.
“We expect the rate of home price growth to slow somewhat over the next few months before reaccelerating amidst falling interest rates,” says Realtor.com® Senior Economist Ralph McLaughlin.
The Realtor.com economic research team is forecasting full-year price growth of just 4.6% for the 2024, which would imply further cooling in home price growth over the next few months of data releases, he notes.
“However, with mortgage rates falling to 24-month lows and a high probability of further rate reductions, there is a significant chance that the rate of home price growth will bottom out over the next months and then reaccelerate at the end of the year or at the beginning of next as the purchasing power of homebuyers begins to reflect a more favorable rate environment,” says McLaughlin.