According to the latest S&P CoreLogic Case-Shiller National Home Price Index, home prices in the United States grew by 3.2% in July. This ends a 15-month streak of decreasing year-over-year gains in the index that began in early 2018. However, home prices in the West continue their cooldown, with prices in Seattle falling for the third month in a row and home price growth in San Francisco falling very close to zero.
Average home price growth in the top 10 metropolitan areas increased by 1.6%, down from the previous month’s 1.9% increase. In addition, the top 20 metropolitan areas entered its 16th straight month of slowing price growth, posting a gain of 2% year over year, down from 2.2% in June. Eleven of the top 20 metropolitan areas reported lower price increases compared to the previous month, which is unchanged from June.
Phoenix sits at the top of the pack for the second straight month, and is followed by Las Vegas as the fastest-growing housing market in the 20-city index, with home price growth of 5.8% and 4.7%, respectively. Metros with the slowest price growth are made up predominantly by markets in the West, with Seattle, San Francisco and Los Angeles making up three of the bottom five, with home price growth of -0.6%, 0.2% and 1.1%, respectively.
This month’s report brought us the first sign of housing market stabilization in over 18 months. What’s more, the geographic inversion in-home price growth has strengthened its grip, with Pacific markets making up half of the 10 markets with the slowest home price growth, while Southern and Midwestern markets make up half of the 10 markets with the quickest home price growth. This is a welcome sign to homeowners in these second-tier markets, where home prices have struggled in the recent past to rise above inflation for any extended period. Homebuyers in the most expensive but now slowest-growing markets in the Pacific are likely feeling flashes of relief, as a combination of low mortgage rates and moderate home price growth is easing what has been years of painfully low home affordability.
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