Home prices continue to rise across the U.S., with the newest S&P CoreLogic Case-Shiller Index data confirming a fifth consecutive monthly increase.
On a seasonally adjusted basis, prices rose 0.93% month over month in June while remaining essentially flat year over year and keeping pace with last year’s historic high points. The national home price index is now only 0.02% below its all-time peak, coincidentally set in June 2022.
With six months of price index data in the books, the national index has grown 4.7% since the start of 2023 — slightly more than the series’ historical median increase for a full calendar year.
The 10-city and 20-city composite indices, which track price growth in some of the country’s largest metro areas, posted similar monthly increases of 0.93% and 0.94%, respectively. Year over year, the 10-city composite was down 0.5% while the 20-city composite was down 1.2%.
“As we’ve noted previously, the recovery in home prices is broadly based,” said Craig J. Lazzara, managing director at S&P DJI. “Prices rose in all 20 cities in June, both before and after seasonal adjustment. Over the last 12 months, 10 cities show positive returns. Otherwise said, half the cities in our sample now sit at all-time high prices.”
While price growth is generally widespread, Lazzara described regional differences as “striking.” Chicago (where prices were up 4.2% year over year) and Cleveland (4.1%) saw the most price growth on an annual basis, helping solidify the Midwest (2.8%) as the census region with the largest yearly jump. The West (where prices fell 5.9% from June 2022) again saw the weakest price growth, with San Francisco (-9.7%) and Seattle (-8.8%) posting the largest annual price declines among metros tracked by the indices.
“Home price acceleration is most notable in markets that remained relatively affordable throughout the pandemic and saw less volatility from household migration, such as those in the Midwest and New England,” CoreLogic chief economist Selma Hepp said. “Home prices in these markets are now catching up with more expensive ones.”
Lazzara and Hepp each projected more price strength in the near term while recognizing that volatility in interest rates still looms as a crucial headwind.
“We recognize that the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, but the breadth and strength of this month’s report are consistent with an optimistic view of future results,” Lazzara said.
“While home prices have remained strong in 2023, elevated mortgage rates complicate the situation for potential homebuyers, a trend that will likely constrain additional price gains for the rest of the year,” Hepp said. “Nevertheless, home prices are still expected to reaccelerate and reach mid-single-digit growth rate by the end of the year, according to CoreLogic’s latest HPI forecast.”