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The S&P CoreLogic Case-Shiller U.S. National Home Price Index shows that home prices rose to an all-time high even as mortgage interest rates increased. Prices nationwide were 5.4% higher than they were in June 2023 on a three-month running average that ended in June, according to data released Tuesday. Although this was an index record, the annual gain was less than May’s 5.9% reading. The index’s 10-city composite rose 7.4% annually, down from 7.8% in the previous month. The 20-city composite was 6.5% higher year over year, down from a 6.9% increase in May.
New York saw the highest annual gain among the 20 cities, with prices climbing 9% in June, followed by San Diego and Las Vegas with annual increases of 8.7% and 8.5%, respectively. Portland, Oregon, saw just a 0.8% annual rise in June, the smallest gain of the top cities. Since housing affordability has been a major talking point in this election cycle, this month’s report also broke out home values by price tier, dividing each city’s market into three tiers. Looking just at large markets over the past five years, it found that 75% of the markets covered show low-price tiers rising faster than the overall market.
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New York also has the largest divergence between low- and high-tier prices. On the other hand, over the previous five years, San Diego has witnessed the biggest increase in the value of higher-end homes.
Over the last five years, prices have increased 72% in the San Diego market overall, but only by 63% in the lower tier and 79% in the high tier. The increase in prices came even as mortgage rates rose sharply from April through June, which is the period averaged on the index. Usually when rates rise, prices cool.
According to news, the average rate on the 30-year fixed began the month of April slightly below 7% and by the end of the month shot up to 7.5%. Rates remained above 7% before dropping back below that level in July, and the rate is currently approximately 6.5%. Although monthly price increases are anticipated heading into the fall due to seasonal factors and increased inventory on the market, prices are unlikely to decline significantly and are predicted to remain higher than they were last fall.
