Another month, another record high in the S&P CoreLogic Case-Shiller U.S. National Home Price Index — although the gain fell notably short of seasonal expectations.
The index’s July reading of 325.78, up 0.11% month over month, marked the metric’s 14th straight record high. But with activity in the late summer of this year dented significantly by high mortgage rates and low affordability, the slowing of the market was clear in the Case-Shiller data. Monthly price growth slowed for the fourth consecutive month, and year over year, the index slowed to a 5% gain (down from 5.5% in June) after hitting a zenith of 6.5% in both February and March.
The 10- and 20-City Composite Indices, which track home prices in some of the country’s largest cities, also decelerated. The 10-City Composite was up 6.8% year over year (down from 7.4% one month prior), while the 20-City Composite saw a 5.9% annual gain (down from 6.5%).
“Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index. … 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,” said Brian D. Luke, head of commodities, real & digital assets at S&P Dow Jones Indices.”
The indices are still growing at a rate surpassing long-run averages after accounting for inflation, Luke noted. And expectations are that the market should see some more heat now that the Federal Reserve has begun its long-awaited rate-lowering cycle.
“With the summer characterized by broader cooling of housing demand amid high mortgage rates, home prices continued to weaken, and July monthly gains appear to be falling below the historical trend. Nevertheless, with a speedy decline in mortgage rates since August, housing market demand tracked by pending sales activity in CoreLogic data is finally showing signs of a rebound, which is expected to boost monthly price gains and return them to historical trends,” said Selma Hepp, chief economist at CoreLogic.
“Interestingly, the weakness in home prices remains in markets that have struggled with demand this year, including markets in Texas and Florida, while more expensive Western markets started to feel the pressure from rising rates in late spring. Going forward, home prices are likely to see a boost from a drop in mortgage rates and improved affordability.”
