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The numbers: Home prices in the 20 biggest U.S. metros set yet another record high in August, but have decelerated significantly under the weight of high mortgage rates.
The S&P CoreLogic Case-Shiller 20-city house price index rose 0.4% in August compared to the previous month.
Home prices in the 20 major U.S. metro markets were up 5.2% in the last 12 months ending in August.
That’s a deceleration compared to an increase of 5.9% the previous month. Economists surveyed by Dow Jones Newswires and The Wall Street Journal expected the 20-city index to increase 5.1%.
A broader measure of home prices, the national index, rose 0.3% in August and was also up 4.2% over the past year. All numbers are seasonally adjusted.
Home prices posted the slowest gain since September 2023.
Yet the 20-city and the national index are at an all-time high.
Key details: New York posted the biggest year-over-year home-price gains in August. Prices were up 8.1%.
Home prices grew the slowest in Denver, by 0.7%.
| Cities | Change from last year |
| Atlanta | 3.7% |
| Boston | 5.5% |
| Charlotte | 5% |
| Chicago | 7.2% |
| Cleveland | 6.9% |
| Dallas | 1.6% |
| Denver | 0.7% |
| Detroit | 6% |
| Las Vegas | 7.3% |
| Los Angeles | 5.9% |
| Miami | 5.1% |
| Minneapolis | 2% |
| New York | 8.1% |
| Phoenix | 2.1% |
| Portland | 0.8% |
| San Diego | 5.7% |
| San Francisco | 2.8% |
| Seattle | 5.2% |
| Tampa | 1.7% |
| Washington | 5.4% |
| Composite-20 | 5.2% |
A separate report from the Federal Housing Finance Agency also showed home prices were up by 0.3% in August when compared to the previous month, and were up 4.2% in the past year.
“The slow but continued house price growth and the effect of locked-in interest rates led to persistent housing affordability challenges,” the agency said.
The median price of a resale home was $414,200 in August, and a newly built home was $410,900.
Big picture: Home prices are feeling the weight of a prolonged period of high mortgage rates.
Homeowners thus far have enjoyed the benefits of home-price appreciation, but growth in prices look to be less robust as fewer home buyers purchase homes.
What S&P said: “Home-price growth is beginning to show signs of strain, recording the slowest annual gain since mortgage rates peaked in 2023,” Brian D. Luke, head of commodities, real estate and digital assets at S&P Dow Jones Indices, said in a statement.
“Prices continue to decelerate for the past six months, pushing appreciation rates below their long-run average of 4.8%,” he added.
There was a clear divergence between how home prices fared in Democrat-leaning blue states and Republican-leaning red states, Luke added.
“Comparing average gains of traditional red and blue states highlight a slight advantage for home price markets of blue states,” he explained. “With stronger gains in the Northeast and West than the South, blue states have outperformed red states dating back to July 2023.”
What are they saying? “This month’s release covers home sales in June, July and August, a period in which home sales activity, time on market, and price cuts tilted in buyers’ favor,” Hannah Jones, a senior economic research analyst at Realtor.com, said in a statement.
But even as “mortgage rates started to fall in May and continued to generally trend lower through September,” she added, “this drop in rates has not yet resulted in a significant uptick in demand and home sales activity, which meant home-price growth continued to mellow.”
(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)
Looking ahead: “Next year, we expect a small recovery in buyer demand which should offset growing resale supply, preventing house price inflation slowing any further,” Thomas Ryan, an economist focused on North America at Capital Economics, wrote in a note.
“We are forecasting 4% house price rises in 2025 and 2026,” he added.