Home prices hit another all-time high this summer.
Meanwhile, the 20-City Composite notched a year-over-year jump of 6.5% in June, falling short of May’s 6.9% gain.
New York led the cohort, where prices rose 9% annually that month. San Diego and Las Vegas followed, scoring 8.7% and 8.5% price gains, respectively.
Elevated mortgage rates complemented price highs that month, with the 30-year fixed rate hovering near 7% in June. While home prices typically decline when borrowing costs rise, a lack of supply has kept homebuyers financially fenced out.
Home sale volumes have crawled through this summer as prices reached uncomfortable levels. Prior data from the National Association of Realtors disclosed that existing home sales slumped 5.4% between May and June. This has since improved, as a recent NAR report shows that sales jumped 1.3% in July.
Developers have also taken a step back recently, causing US construction to hit a four-year low in July. With priced-out consumers unable to absorb new housing, builder confidence hit a new low in August.
How long will this last?
In June, Bank of America forecast that price momentum would keep up until at least 2026, with the market set to appreciate 4.5% and 5% this year and the next.
A more recent report from Fitch Ratings outlined that prices could rise as much as 5% this year. Price growth could accelerate once the Federal Reserve starts cutting rates, the firm previously noted. The Case-Shiller index has so far gained 4.6% since January.
