Home Prices in US Hit Record High, Erasing Recent Decline

Home prices in the US climbed to a record high as the market bounces back.

(Bloomberg) — Home prices in the US climbed to a record high as the market bounces back. 

A national gauge of prices rose for a sixth straight month, increasing 0.6% in July from June, according to seasonally adjusted data from S&P CoreLogic Case-Shiller. So far this year, the national measure has climbed 5.3%.

This year’s gains have offset the 5% decline in prices from last year’s peak in June 2022 to January 2023, when the market was slowing.   

The index measures a period where mortgage rates started to push back up toward 7%. Many owners are reluctant to put their homes on the market at a time of high borrowing costs, leaving buyers to fight over a limited supply of homes listed for sale. The number of homes up for resale in August was down 7.9% from a year earlier, according to Realtor.com.

“Buyer demand continues to outmatch housing supply, creating upward pressure on home prices despite the fact that home purchase costs are taking up an outsized share of household incomes,” Realtor.com’s Chief Economist Danielle Hale said in a statement. 

High borrowing costs are also denting sales for new homes, which dropped in August to a five-month low, government data showed Tuesday.

Read More: US New-Home Sales Fall to Five-Month Low Amid Elevated Rates

On a year-over-year basis, home prices nationally increased 1%, according to the S&P CoreLogic index. Prices were flat in June.

Chicago, Cleveland and New York posted the biggest annual gains in a 20-city measure of prices in July. Las Vegas and Phoenix were the worst performers, with declines of 7.2% and 6.6% respectively. 

(Updates with new-home sales in sixth paragraph)

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.