Home prices continued to break records in July, according to reports released by S&P Dow Jones and FHFA on Tuesday. Some economists said lower rates may fuel demand, pushing prices even higher.
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Home prices continued to hit record highs in July while also showing signs of slowing, according to dueling housing data released Tuesday by the Federal Housing Finance Agency and S&P Dow Jones.
The S&P CoreLogic Case-Shiller National Home Price NSA Index revealed a 5 percent annual gain in July, down from 5.5 percent the previous month. Meanwhile, the 10-City Composite and 20-City Composite, which measure prices in the nation’s largest cities, grew on an annual basis by 6.8 percent and 5.9 percent, respectively.
Those figures were down from 7.4 percent for the 10-City Composite and 6.5 percent for the 20-City Composite the previous month.
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New York saw the highest gain on an annual basis in July with an 8.8 percent increase in home prices year over year. Las Vegas and Los Angeles also saw substantial annual growth at 8.2 percent and 7.2 percent, respectively.
Month-over-month and on a seasonally adjusted basis, the National Index saw an increase of 0.2 percent while the 20-City and 10-City Composite each posted an increase of 0.3 percent.
“Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index,” Brian D. Luke, CFA, head of Commodities, Real & Digital Assets, said in a statement.
“While the S&P 500 has achieved 39 records highs and the S&P GSCI Gold TR hit 35 record highs, housing is following a similar trajectory. The growth has come at a cost, with all but two markets decelerating last month, eight markets seeing monthly declines, and the slowest annual growth nationally in 2024. Overall, the indices continue to grow at a rate that exceeds long-run averages after accounting for inflation.”
Robert Frick, a corporate economist with Navy Federal Credit Union, said the slowdown in price growth may not be long-lived, however, given the recent drop in rates.
“A slowdown in the Index may be temporary, as recent lower mortgage rates may cause more demand for houses, bidding up their prices even more,” Frick said in a statement emailed to Inman. “The only fix for high prices is to increase the number of homes, especially starter homes, which severely lag demand and are about 4 million below where we should be, based on population.”
According to the FHFA’s HPI, home prices in the U.S. rose by 4.5 percent from July 2023 to July 2024, and by 0.1 percent from June 2024 to July 2024.
Across the country’s nine census divisions, seasonally adjusted price changes on an annual basis ranged from 1.6 percent in the West South Central division to 7.5 percent in the East North Central division. On a monthly basis, price changes ranged from -0.7 percent in the South Atlantic division to 0.9 percent in the East North Central and New England divisions.
Dr. Anju Vajja, deputy director for FHFA’s Division of Research and Statistics, said changes in mortgage rates coupled with little price growth month over month offer some hope to homebuyers who are struggling.
For the third-consecutive month, U.S. house prices showed little movement,” Dr. Vajja said in a statement. “Gradually declining mortgage rates and relatively flat house prices may improve housing affordability.”
Email Lillian Dickerson
