US home prices notch another record high in July
Written by Black Hot Fire Network on September 24, 2024
US home prices hit a record high in July, highlighting affordability challenges buyers face despite a downward trend in mortgage rates.
The S&P Case-Shiller National Home Price Index rose 0.2% over the prior month in July on a seasonally adjusted basis, unchanged from June’s monthly increase. This marked the sixth consecutive monthly increase and an all-time high for the index.
On an annual basis, prices increased 5.0%, down from the 5.5% gain seen in June.
The index tracking home prices in the 20 largest metropolitan areas gained 0.3% in July from June, lower than Bloomberg consensus estimate of 0.4% and June’s 0.5%. The 20-city index jumped 5.9% compared to last July.
“Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index,” Brian Luke, head of commodities, real & digital assets at S&P Dow Jones Indices, wrote in a statement.
“While the S&P 500 has achieved 39 record highs and the S&P GSCI Gold TR hit 35 record highs, housing is following a similar trajectory. 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. Overall, the indices continue to grow at a rate that exceeds long-run averages after accounting for inflation.”
Affordability challenges persist
New York reported the highest year-over-year gains among the 20 metro areas tracked by Case-Shiller in July, with annual price gains clocking in at 8.8%. Las Vegas and Los Angeles followed with gains of 8.2% and 7.2%, respectively.
Tuesday’s report came as mortgage rates hit their lowest level since February 2023 last week as the Fed began cutting interest rates.
Still, both buyers and sellers remain on the fence about the housing market. High home prices, limited inventory and elevated rates have weakened sales activity. Some industry experts warn that more will need to happen to unlock buyer appetite.
“I don’t think rates are low enough to really get the market moving. I think rates need to come down by another 100 basis points to really spark interest,” Meredith Whitney Advisory Group CEO Meredith Whitney told Yahoo Finance (video above).
And home prices have to come down “at least 15%” to make housing costs even tolerable, Whitney explained.
Separate data from the National Association of Realtors showed that the median home price increased 3.1% in August from a year ago to $416,700, the 14th consecutive month of annual price increases.
Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.
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