According to data from the American Enterprise Institute’s (AEI) Housing Center, national constant-quality home prices in July were up 2.7% from a month earlier and up 3.5% from a year ago (not seasonally adjusted).
While the year-over-year (YoY) change is down significantly from March 2022’s record pace of 18.3%, it bottomed out in April 2023 and is expected to continue rising for August and September 2023, based on Optimal Blue rate lock data.
YoY home price appreciation (HPA) varied significantly among the 60 largest metros. It ranged from -5.9% in Austin (-9.1% inflation-adjusted) to 7.5% in Kansas City (4.3% inflation-adjusted).
Home prices have increased in all of the top 60 metros since their respective recent troughs in either December 2022 or January 2023. Metros in the Midwest, which continue to be relatively affordable, lead the recovery.
Historically, low price tier HPA has outpaced HPAs for the upper price tiers. This trend continued in July, with the YoY HPA up 5.7% and 3.1% for the low price tier and high price tier, respectively.
Although July months’ supply has surpassed the pre-pandemic level, low levels of supply continue to signal a strong seller’s market. Months’ supply stood at 3.6 months, up from 3.1 months in June and 3.3 months in July 2019 (pre-pandemic). The months’ supply for the low price tier came in at 2.2 months in July 2023, helping to explain the 5.7% YoY price growth for this tier.
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