U.S. home prices continued to rise in June but at a much slower pace compared with the first half of this year, according to CoreLogic’s home price index.
Month-over-month, home prices increased 0.3% compared with May, and were up only 4.7% year-over-year.
That’s down from 4.9% in May.
CoreLogic is currently forecasting that by summer 2025, prices will slow to an annual rate of 2.3%.
In June, Miami once again usurped San Diego for the metro with the greatest annual home price growth.
The cooling of monthly gains during the spring home-buying season reflects the impact of high mortgage rates on home buyers’ budgets and constraint on affordability, the software and data firm says.
While no states posted annual home price declines in June, only one – South Dakota – posted double-digit growth, coming in at 10%.
Behind South Dakota, the other states with the highest increases year over year were New Jersey (9.3%), Rhode Island (9.2%), Connecticut (8.5%), and New Hampshire (8.2%).
Among the major cities, Miami posted the highest gain at 10% year over year. San Diego and Las Vegas tied for second at 7.5%, with Chicago coming in third at 7.2%.
Although the Federal Reserve Board is anticipated to cut rates in September, high interest rates continue to affect affordability, and several markets in the South continue to see inventory increases that are pulling prices below last year’s numbers.
“Housing market activity essentially froze at the end of the spring homebuying season as high mortgage rates continued to compress affordability and dissuade potential homebuyers,” says Selma Hepp, chief economist for CoreLogic. “The 0.3 percent gain in prices from the month before was less than half the increase seen between May and June prior to the pandemic, when the gains averaged 0.8 percent.
“In addition, cooling home prices continued to spread across more markets, and nine states reported a monthly decline, up from three states last month,” Hepp adds. “The April surge in mortgage rates notably weighed on consumer sentiment, and consumers increasingly chose to respond to the anticipation of a lower mortgage rate environment later this year.”
Photo: Ian MacDonald