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Home Prices Reach New Highs In July 2023

Christine Stuart
Sep 26, 2023
Home Sales

Chicago, Cleveland, and New York drive robust growth; S&P CoreLogic Case-Shiller Indices and the FHFA report a consistent positive trajectory despite regional disparities.

U.S. home prices have showcased an upswing in July 2023, according to both the S&P CoreLogic Case-Shiller Indices and the Federal Housing Finance Agency. 

According to the S&P CoreLogic Case-Shiller Indices, 19 out of the 20 significant metro markets reported a growth in prices on a month-over-month basis. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index documented a 1% annual growth in July. 

The FHFA reported house prices rose in July, up 0.8% from June. 

“U.S. house prices continued to appreciate in July, consistent with the trend observed over the last several months,” said Nataliya Polkovnichenko, supervisory economist in FHFA’s Division of Research and Statistics. “Regionally, all nine census divisions posted positive price appreciation over the last 12 months, although the Pacific and Mountain divisions experienced only modest growth.”

The monthly report from the S&P CoreLogic Case-Shiller Indices also highlighted that the 10-City Composite saw an uptick of 0.9%, a significant improvement from the -0.5% dip in June. Similarly, the 20-City Composite experienced a year-over-year increase of 0.1%, rebounding from its -1.2% decline in the previous month.

Leading the charge were Chicago, Cleveland, and New York. For the third consecutive month, these cities reported the most significant year-over-year gains in July, with Chicago at the forefront, boasting a 4.4% surge, Cleveland following closely with a 4% rise, and New York securing third place with a 3.8% ascent.

Comparing July 2023 to June 2023, 12 out of the 20 cities observed an increase in prices, whereas 8 reported a decrease. The report found that 18 out of these 20 cities showcased a positive momentum in price growth compared to their previous month.

"After a strong, 5% cumulative U.S. home price gain since the early spring, monthly increases are plateauing to a seasonal average, which reflects the pressure that higher mortgage rates have put on affordability," said Selma Hepp, CoreLogic chief economist. "As a result of the early 2023 growth, annual price appreciation should accelerate in the coming months before slowing again. Areas in the Midwest continue to lead the national gains given their relative affordability. Markets that saw home prices reset following the recent surge in mortgage rates are expected to see stronger gains over the next 12 months, particularly those in the West."   

On a month-to-month basis, before any seasonal adjustments, the U.S. National Index, along with the 10-City and 20-City Composites, all saw a 0.6% growth in July. Post-seasonal adjustment, the National Index echoed this growth, with the 10-City Composite rising by 0.8% and the 20-City Composite climbing by 0.9%.

"The increase in prices that began in January has now erased the earlier decline, so that July represents a new all-time high for the National Composite. Moreover, this recovery in home prices is broadly based. As was the case last month, 10 of the 20 cities in our sample have reached all-time high levels," Craig J. Lazzara, managing director at S&P DJI, said. 

However, regional disparities remain. "On a year-over-year basis, the Revenge of the Rust Belt continues. The three best-performing metropolitan areas in July were Chicago (+4.4%), Cleveland (+4.0%), and New York (+3.8%), repeating the ranking we saw in May and June. The bottom of the leader board reshuffled somewhat, with Las Vegas (-7.2%) and Phoenix (-6.6%) this month’s worst performers," Lazzara said. 

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