Home Prices Surge To New All-Time High Despite Soaring Mortgage Rates

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Home prices surged in July even while interest rates jumped higher.

The S&P CoreLogic Case-Shiller 20-city house price index rose a seasonally adjusted 0.9 percent in July, the sixth month of increasing home prices.

Compared with a year ago, house prices are up 0.1 percent. A month earlier, they had been down on an annual basis by 1.2 percent. The index is hit a new all-time high in July.

The 20-city house price index is considered the gold standard of home price barometers.

The narrower 10-city index, which tracks prices in the largest metro areas in the U.S., rose 0.8 percent in July,  Compared with a year ago, the 10-city index is up 0.9 percent. A month earlier, the index was showing an annual price decline of 0.5 percent.

The broader national index rose a seasonally adjusted 0.6 percent in July. Compared with a year ago, the index shows prices up one percent, up from flat a month ago.

Both the 10-city and national index also made new all-time highs in July.

“We have previously noted that home prices peaked in June 2022 and fell through January of 2023, declining by 5.0% in those seven months. 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. In July, prices rose in all 20 cities after seasonal adjustment (and in 19 of them before adjustment),” said Craig J. Lazzara, Managing Director at S&P DJI.

Before seasonal adjustments, all three indexes were up a strong 0.6 percent month-over-month in July.

The Midwest region posted the biggest home-price increses in the month of July.

separate report from the Federal Housing Finance Agency said home prices rose 0.8 percent in July compared with the prior month. The FHFA’s index has home prices up 4.4 percent year-over-year.
“Although the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results,” Lazzara said.

The surge in home prices is likely partially the result of a dearth of homes being sold by owners. Most homeowners locked in mortgage rates much lower than are available for new home loans. As a result, many owners feel they are anchored to their current home.


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