House prices experienced unusual stagnation this summer
U.S. home price growth continued to slow in July, a trend expected to continue next summer KernLogic data released this week.
National home prices were essentially flat compared to June, rising 4.3% year-on-year in July. Stagnant prices during the usually busy summer home-buying season are unusual, CoreLogic reported, as this was only the second time since 2010 that prices did not rise from June to July. The other exception occurred in 2022, following a rise in mortgage rates.
The real estate analytics firm noted that July marked the 150th straight month of year-over-year home price gains, but those gains fell below 5% for the third month in a row. Furthermore, CoreLogic predicts a significant decline in annual price growth, with an estimated growth of 2.2% by July 2025.
“Housing demand continued to buckle under the pressure of high mortgage rates and unaffordable home prices, leading to a significant slowdown in home price increases over the summer,” Selma Hepp, chief economist at CoreLogic, said in a statement.
“The question for home prices going forward is whether the upcoming Fed rate cut and the expected continuation of declining mortgage rates will be enough to motivate potential homebuyers who may come to fear a cooling labor market and continued uncertainty about a soft landing, together with the anticipation surrounding the presidential elections. And while lower mortgage rates are a boost to affordability and will likely boost buyer demand, the usual housing market slowdown is ahead and will likely hold back significant activity growth.”
Some parts of the country are bucking the national trend. Rhode Island led all states in July with 10.6% year-over-year price growth, followed by New Jersey (+9.7%) and Connecticut (8.3%). No state recorded a price decline compared to July 2023.
CoreLogic’s analysis of the ten largest U.S. metropolitan areas found that Miami led the way with price growth of 9.1% for the year ending in July. This was followed by Chicago (+7.2%) and Las Vegas (+7%).
Four of the five markets considered most at risk of a price decline in the coming year were in the Southeast. These include Atlanta and the Florida metros Gainesville, Palm Bay and Lakeland.
CoreLogic’s national report was strengthened by Clear MLS regional data released Wednesday. Home prices in six Mid-Atlantic states and the District of Columbia rose 4.2% year over year in August. Home sales across the region fell 0.7% year over year, but were significantly slower in major metro areas Philadelphia (-3.3%) and Washington, DC (-5.1%). The 4,351 sales in DC last month were the lowest for the month of August since 2008.
