Home prices hit record high in July

Home prices hit record high in July

Home price gains have risen to a new record high across the nation in July, overcoming affordability challenges that have kept many home buyers on the sideline, according to the latest S&P CoreLogic Case-Shiller Indices report.

Over the past six months, home prices have risen enough to recover the 5% loss between June 2022 and January. In July, home prices have surged by 0.6% and now stand 1% above its year-ago level. The 10-city Composite and the 20-city Composite rose 0.8% and 0.9%, respectively, to measure home prices in major metros across the region.

The annual gain in home prices beat predictions that forecast a 0.5% year-over-year increase in the National index for July.

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Despite high borrowing costs, homebuyers are still interested in their homes.

The increase in home prices shows that there is a need for housing even at 7% mortgage rates. The average fixed-rate mortgage rose to 7.19% last week, according to Freddie Mac. Realtor.com Chief Economist Danielle Hale said that the higher borrowing costs have cooled buyer demand, but that the lack of available housing supply has helped keep home prices steady.

S&P CoreLogic Case-Shiller Index showed that buyer demand continues to outperform housing supply, creating upward pressure on home prices despite the fact that home purchase costs are taking up an outsized share of household incomes, Hale said in a statement.

The current home sales data show the impact of high mortgage rates and high prices on the housing market. The National Association of Realtors said that existing home sales had moved lower in August. total current home sales dropped 0.7% from July to a seasonally adjusted annual rate of 4.04 million in August. The sales rose 15.3% year-on-year, down from 4.77 million in August 2022.

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The most significant gains were made in those cities.

The most notable year-over-year gains were among the 20 cities, Cleveland and New York. Chicago remained the best place with a 4.4% year-over-year price hike. Cleveland came in second, recording a 4% increase, and New York recorded a 3.8% gain.

While 12 cities reported higher prices, eight saw prices drop on an annual basis. Las Vegas was the worst performer, resulting in a drop in home prices by 7.2%. The second-steepest drop in home prices in Phoenix was recorded at 66%, the lowest in the city's history. Home prices have lagged in these markets because supply has held up better, Hale said.

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