The latest House Price Indices (HPI) from S&P CoreLogic Case-Shiller and the Federal Housing Finance Agency (FHFA) indicate price appreciation is slowing down.
The FHFA’s HPI showed U.S. house prices increased 5.7% between the first quarter of 2023 and the second quarter of 2024, rising in 96 of the top 100 largest metropolitan areas over the last four quarters. Prices were up by 0.9% in Q2 from Q1 2024, decreasing by 0.1% from May to June.
“U.S. house prices saw the third consecutive slowdown in quarterly growth,” said Dr. Anju Vajja, Deputy Director for FHFA’s Division of Research and Statistics. “The slower pace of appreciation as of June end was likely due to higher inventory of homes for sale and elevated mortgage rates.”
The five states with the highest annual appreciation were Vermont (13.4%); West Virginia (12.3%); Rhode Island (10.1%); Delaware (10%), and New Jersey (9.9%).
All nine census divisions had positive house price changes year-over-year, with the Middle Atlantic division posting a 8.5% increase from Q2 2023 to Q2 2024 – the largest growth.
CoreLogic reported a 5.4% annual gain in home prices this June, down from May’s 5.9% annual gain. The 10-City Composite saw an annual increase of 7.4%, down from a 7.8% annual increase in the previous month. The 20-City Composite posted a year-over-year increase of 6.5%, dropping from a 6.9% increase in the previous month.
“The S&P CoreLogic Case-Shiller Indices continue to show above-trend real price performance when accounting for inflation,” CoreLogic Head of Commodities, Real & Digital Assets Brian Luke said. “Home prices and inflation continue to factor into the political agenda coming into the election season. While both housing and inflation have slowed, the gap between the two is larger than historical norms, with our National Index averaging 2.8% more than the Consumer Price Index. That is a full percentage point above the 50-year average. Before accounting for inflation, home prices have risen over 1,100% since 1974, but have slightly more than doubled (111%) after accounting for inflation.”
Among the 20 cities CoreLogic analyzed, New York had the highest annual gain in house prices in June, a 9% increase. Ranking second and third were San Diego and Las Vegas, which reported YOY increases of 8.7% and 8.5%, respectively.
Portland once again held the lowest rank for the smallest year-over-year growth, reporting a 0.8% annual increase in June.
Looking at historical data over the last five years, 75% of the markets CoreLogic analyzed showed lower-priced tiers rising faster than the market overall, Luke went on to point out.
“For example, the lower tier of the Atlanta market has risen 18% faster than the middle- and higher-tiered homes,” he said. “New York’s low tier has the largest five-year outperformance, rising nearly 20% above the overall New York region.
The FHFA’s next monthly HPI report on July’s data is expected to be released Sept. 24.
