US home prices continued to rise during the month of July, hitting a new record high and posting gains for the sixth straight month, as low inventory to historic levels drove the cost of a home higher.
Prices rose 0.6% from the previous month, according to seasonally adjusted data from the S&P CoreLogic Case-Shiller National Home Price Index released Tuesday.
Compared to last year, the national composite index was also higher, with prices up 1% from July 2022, the previous peak, according to Case-Shiller data. This was followed by a decline in housing prices during January of this year, falling by 5% during those seven months.
“The increase in prices that began in January has now erased the previous decline, so July represents a new all-time high for the National Composite Index,” Craig Lazzara, managing director of S&P Dow Jones Indices, said in a statement. .
What’s more, he added, is that the recovery in house prices is taking place on a broad scale. As was the case last month, 10 out of 20 cities in the sample reached all-time highs. In July, prices rose in all 20 cities after seasonal adjustment.
Where prices rise and fall further
The cities that saw the largest price increases in July compared to the previous year were Chicago, up 4.4%; Cleveland rises 4.0%; and New York by 3.8%. The same three cities also saw the most appreciation in June.
On the other end of the spectrum, the cities that saw the largest year-over-year price declines in July were in the West. Prices in Las Vegas were down 7.2% compared to last year, and prices in Phoenix were down 6.6%.
The Midwest, where prices rose 3.2% in July from a year ago, continues to see the greatest price strength. Followed by the Northeast, with an increase of 2.3%. The West, where prices were down 3.8% from a year ago, and the South, where prices were down 3.6%, continue to see annual price declines.
National home prices have risen 5.3% since January, but monthly increases are not as large as they were earlier this year. That’s because rising mortgage rates have put pressure on affordability, said Selma Heap, chief economist at CoreLogic.
Average interest rates on 30-year mortgages rose more than 7% in August, reaching a high not seen in 20 years, according to Freddie Mac. The average rate has remained there as the Federal Reserve continues its historic campaign to curb inflation.
“Markets that have seen home prices reset following the recent rise in mortgage rates are expected to see stronger gains over the next 12 months, especially those in the West,” Hipp said.