US home prices hit another record high

  • US home prices hit a record in June, according to the S&P CoreLogic Case-Shiller index.

  • Prices rose 5.4% on an annual basis, though the increase was a deceleration from the prior month.

  • The housing market has faced a logjam this summer, with sale volumes and construction slowing.

Home prices hit another all-time high this summer.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index climbed 5.4% from a year ago in June. While this took it to a record, in a moderately positive sign, the rate of increase decelerated from the prior month, according to the new data.

Meanwhile, the 20-City Composite notched a year-over-year jump of 6.5% in June, falling short of May's 6.9% gain.

New York led the cohort, where prices rose 9% annually that month. San Diego and Las Vegas followed, scoring 8.7% and 8.5% price gains, respectively.

Elevated mortgage rates complemented price highs that month, with the 30-year fixed rate hovering near 7% in June. While home prices typically decline when borrowing costs rise, a lack of supply has kept homebuyers financially fenced out.

Home-sale volumes have crawled through this summer as prices have reached uncomfortable levels. Prior data from the National Association of Realtors showed that existing-home sales slumped 5.4% between May and June. This has since improved, as a recent NAR report found that sales jumped 1.3% in July.

Developers have also taken a step back recently, causing US construction to hit a four-year low in July. With priced-out consumers unable to absorb new housing, builder confidence hit a new low in August.

How long will this last?

In June, Bank of America forecast that price momentum would keep up until at least 2026, with the market set to appreciate 4.5% and 5% this year and the next, respectively.

A more recent report from Fitch Ratings outlined that prices could rise as much as 5% this year. Price growth could accelerate once the Federal Reserve starts cutting rates, the firm previously said. The Case-Shiller index has so far gained 4.6% since January.

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