Home prices saw unusual stagnation this summer

U.S. home-price appreciation continued to slow in July, a trend that is expected to continued through next summer, according to CoreLogic data released this week.

National home prices were virtually flat compared to June and rose 4.3% year over year in July. Stagnant prices during the typically busy summer home-buying season are unusual, CoreLogic reported, as this was only the second time since 2010 that prices didn’t increase from June to July. The other exception occurred in 2022 following a surge in mortgage rates.

The real estate analytics company noted that July marked a 150th straight month of annualized growth in home prices, but these gains slipped below 5% for a third straight month. Additionally, CoreLogic forecasts significant slippage in annual price appreciation with estimated growth of 2.2% by July 2025.

“Housing demand continued to buckle under the pressure of high mortgage rates and unaffordable home prices, leading to a considerable slowing of home price gains during the summer,“ CoreLogic Chief Economist Selma Hepp said in a statement.

“The question for home prices going forward is whether the upcoming rate cut from the Fed and expected continuation of falling mortgage rates will be sufficient to motivate potential homebuyers who may start to fear cooling labor market and continued uncertainty of a soft landing, along with anticipation around the presidential election. And while lower mortgage rates are a boost to affordability and are likely to help buyer demand, the usual fall housing market slowdown is upon us and is likely to contain any significant surge in activity.”

Some areas of the country are bucking the national trend. Rhode Island led all states in July with 10.6% year-over-year price growth, followed by New Jersey (+9.7%) and Connecticut (8.3%). No states posted a price decline compared to July 2023.

CoreLogic’s analysis of the 10 largest U.S. metro areas showed that Miami led the way with 9.1% price growth for the year ending in July. It was followed by Chicago (+7.2%) and Las Vegas (+7%).

Four of the five markets deemed most at risk of a price decline over the next year were in the Southeast. These include Atlanta and the Florida metros of Gainesville, Palm Bay and Lakeland.

CoreLogic’s national report was reinforced by Bright MLS regional data released Wednesday. Home prices in six Mid-Atlantic states and the District of Columbia rose 4.2% year over year in August. Home sales across the region were down 0.7% year over year but were considerably slower in the major metros of Philadelphia (-3.3%) and Washington, D.C. (-5.1%). The 4,351 sales in D.C. last month were the lowest for the month of August since 2008.