Black Knight, Inc. released its Home Price Index for July 2023, providing fresh insights into a U.S. housing market that has become a subject of both hope and caution. Even as interest rates float near a considerable 7.25%, home prices reached a new record high for the third consecutive month.
Andy Walden, Black Knight's vice president of enterprise research, emphasized that this wasn't the whole story. "While home prices rose on both seasonally adjusted and non-adjusted bases, July’s 0.23% non-adjusted month-over-month growth was smaller than the 0.34% non-adjusted increase July has seen on average over the past 25 years, suggesting a possible transition may be underway," Walden said.
The report also found other indications that the market may be cooling off. Black Knight's rate lock and sales transaction data revealed lower average purchase prices and seasonally adjusted prices per-square-foot in recent sales. “All of these factors combined underscore the need to focus on seasonally adjusted month-over-month movements rather than simply relying on the traditional annual home price growth rate,” Walden added.
In regional trends, Black Knight's report observed that seasonally adjusted price gains were evident in 99 of the largest U.S. markets, though at different rates. Hartford, Conn. led the way with a 1.6% increase from June, followed by cities like Providence, Rhode Island (1.2%), and Philadelphia (1.1%). Austin, Texas bucked the trend with a small month-over-month decline in home prices, dropping by 0.1%.
Price growth was strongest in the Northeast and Midwest. In contrast, Western states saw a more significant slowdown from June's growth rates, with affordability issues being cited as a likely reason.
The report concludes with a sense of guarded optimism. While home prices are still rising, the slower monthly gains and regional disparities indicate that the housing market might be entering a period of transition, making the trajectory for the rest of the year less certain. Whether this represents a temporary blip or a signal of a longer-term trend remains to be seen.
