First American Data & Analytics today released its July 2024 Home Price Index (HPI) report. The report tracks home price changes less than four weeks behind real-time at the national, state, and metropolitan (Core-Based Statistical Area) levels and includes metropolitan price tiers that segment sale transactions into starter, mid, and luxury tiers.
House prices nationally are now 55% higher than pre-pandemic levels (February 2020). House price growth reported in last month’s HPI for May 2024 to June 2024 was revised down 0.1 percentage points, from 0.2% to 0.1%.
“July marked the seventh consecutive month of slowing annualized house price appreciation. Elevated mortgage rates have driven affordability to near-record lows, leaving many buyers on the sidelines and keeping sellers rate locked-in,” said Mark Fleming, chief economist at First American. “The combination of the severely unaffordable market conditions and the rate lock-in effect has largely frozen home buying and selling, contributing to the cooling but still positive pace of appreciation. However, the prospect of Federal Reserve interest rate cuts this fall has already sent mortgage rates lower in August, which may spur some buyers and sellers to act and begin to defrost market transaction volume.”
The First American Data & Analytics HPI divides home price changes into three tiers based on local market sales data: starter (bottom third), mid-tier (middle third), and luxury (top third).
“While the national house price trend is interesting, real estate is inherently local and prices are not appreciating in all markets,” said Fleming. “Annual price growth remains strong in top markets where demand continues to outpace supply or where relative affordability is a draw, such as Anaheim, Calif., and Pittsburgh. In markets that offer relative affordability, homes remain more accessible compared to other major markets, making them attractive to buyers who are priced out of higher-cost regions, despite rising prices. In contrast, house prices in other markets are decelerating notably, with prices declining in cities like Austin, Texas, and Tampa, Fla.”
June-July 2024 (month over month) saw a gain of 0.3%. July 2023-July 2024 (year over year) saw a gain of 5.3%.
Redfin July Data
U.S. home prices ticked up 0.2% for the second-consecutive month in July, on a seasonally adjusted basis, according to data from Redfin's latest Home Price Index (RHPI). That marked the smallest month-over-month increase since January 2023.
On a year-over-year basis, home prices rose 6.8% in July, down from 7.3% in June and the lowest annual increase recorded since January.
Home prices continue to inch up to all-time highs due to a shortage of homes on the market relative to buyer demand. Mortgage rates have fallen in recent weeks, but that has not yet translated into a significant increase in buyers, which in turn has prevented prices from rising more quickly.
“There aren’t enough sellers listing their homes to cause prices to fall and there aren’t enough buyers to create competition to drive prices up significantly,” said Redfin Senior Economist Sheharyar Bokhari. “Relatively low sales and gradual price increases will remain the status quo each month until one of those things changes.”
Twenty (40%) of the 50 most populous U.S. metro areas recorded a seasonally adjusted drop in home prices in July, month over month. That number is up from only four metros recording a month-over-month decline in February.
The biggest decline in July was in Austin, TX (-1.6%), similar to First American's data. It was followed by San Francisco (-1.1%) and Nassau County, NY (-0.7%). The highest month-over-month gains were recorded in Indianapolis (1.2%), Miami (1.2%), and San Antonio, TX (1.1%).
