Home prices continued to reach all-time highs in the S&P CoreLogic Case-Shiller Indices for July 2024, though they have begun to decelerate on a monthly basis.
The index, which covers all nine U.S. Census divisions, reflected a 5% annual price gain for July, down from June’s 5.5% annual gain.
The 10-City Composite saw an annual increase of 6.8%, down from a 7.4% annual increase the month prior. The 20-City Composite posted a year-over-year increase of 5.9%, dropping from a 6.5% increase in the previous month.
New York again reported the highest annual gain among the 20 cities with an 8.8% increase in July, followed by Las Vegas and Los Angeles with annual increases of 8.2% and 7.2%, respectively.
The smallest YOY growth took place in Portland, notching the same 0.8% annual increase in July as last month.
"Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index," S&P Dow Jones Indices Head of Commodities, Real & Digital Assets Brian Luke said. "While the S&P 500 has achieved 39 record 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.”
Luke also commented on the regional nuances in price gains, with low-price-tiered indices outperforming their markets.
"We continue to observe outperformance in most low-price tiers in the market on a three- and five-year horizon," he explained. "The low-price tier of Tampa was the best-performing market nationally with five-year performance of 88%. The New York market was the best market annually, posting a gain of 8.9%.”
New York's low-tier index, with home values no higher than $533,000, helped drive that growth with 10.8% annual gains.
"Regionally, the Northeast remains the best-performing market, with New York the top performer for three months running, followed by the Midwest region. All markets in the Northeast and Midwest recorded an all-time high. The South reported the slowest gains regionally but includes five of the seven best-performing markets since 2020," Luke said.
California features the most expensive high-price tiers in the nation, all well over $1 million. These high-priced tiers outperformed in San Diego, Los Angeles, and San Francisco on a one-and three-year basis.
The Federal Housing Finance Agency's (FHFA) House Price Index rose 0.1% percent from June to July, and 4.5% from July 2023 to July 2024.
“For the third consecutive month U.S. house prices showed little movement,” said Dr. Anju Vajja, Deputy Director for FHFA’s Division of Research and Statistics. “Gradually declining mortgage rates and relatively flat house prices may improve housing affordability.”
CoreLogic expects home prices to have softened by next summer, with a predicted increase of 2.3% on a year-over-year basis from June 2024 to June 2025.
Fannie Mae's Home Purchase Sentiment Index (HPSI) revealed that only 17% of consumers considered this July to be a good time to buy a home, down from 19% in June.
