Home Prices Hit a New Record High in June but Show Signs of Slowing Growth

Home prices in the U.S. have reached a new record high but are growing at a slower pace, in a sign the market is starting to turn.

Released on Tuesday, the latest S&P CoreLogic Case-Shiller Index of national home prices hit an all-time high in June, growing 5.4% from one year ago. That was down from a 5.9% annual gain reported the previous month.

“This is the lowest rate of home price appreciation since November 2023, but it is still remarkable given the fact that home prices are at record highs and, in June, mortgage rates were still around 7%,” says Bright MLS chief economist Lisa Sturtevant. “The upward pressure on home prices is making this the most unaffordable housing market in history. First-time and moderate-income home buyers, in particular, increasingly are being left out of the housing market.”

Case-Schiller’s composite indices of home prices in the 10- and 20-largest U.S. cities also hit record highs for June, which is typically the seasonal peak of the year. The 10-city index grew 7.4% on the year, decelerating from a 7.8% gain the prior month. The 20-city index increased 6.5% from a year ago, down from 6.9% in May.

“We expect the rate of home price growth to slow somewhat further,” says Realtor.com® chief economist Danielle Hale. “Even though the number of homes on the market for sale trails 2017 to 2019 levels by 30%, the number of home sales has remained quite low.”

The Realtor.com economic research team projects home price growth of just 4.6% for the whole of 2024, suggesting price growth will continue to decelerate.

In June, New York reported the highest annual gain among the 20 largest cities, with prices rising 9%. Following were San Diego with 8.7% annual price growth and Las Vegas with an increase of 8.5%.

Home prices in Portland, OR, continued to grow at the slowest pace, rising just 0.8% in June from a year ago.

Home prices take center state ahead of election

The Case-Schiller index is considered a leading tracker of home prices, though it is reported with significant delays. Previously, the National Association of Realtors reported that median prices for existing homes hit an all-time high of $426,900 in June, before easing back to $422,600 in July, following seasonal trends.

Prices for newly constructed homes remain near all-time highs after peaking in 2022. The median sales price for new homes was $429,800 in July, according to Census data.

The new record high for national home prices comes as housing affordability plays a major role in the upcoming presidential election.

Vice President Kamala Harris, the Democratic nominee, recently proposed a slate of housing policies, including $25,000 in down-payment assistance for first-time homebuyers. Republican nominee Donald Trump called the plan "a big mistake," saying it would only raise home prices, yet suggested he "might" also consider some form of homebuyer assistance if elected.

“Home prices and inflation continue to factor into the political agenda coming into the election season," says Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices. "While both housing and inflation have slowed, the gap between the two is larger than historical norms."

Luke notes that the Case-Schiller housing price index has recently outpaced overall inflation by 2.8 percentage points, which is one full point higher than the 50-year average.

"Before accounting for inflation, home prices have risen over 1,100% since 1974, but have slightly more than doubled (111%) after accounting for inflation," he says.

The new data also shows that home prices are growing the fastest for entry-level homes in the lowest of three price tiers, which range based on local prices.

"Looking at the last five years, 75% of the markets covered show low-price tiers rising faster than the overall market,” says Luke. “For example, the lower tier of the Atlanta market has risen 18% faster than the middle- and higher-tiered homes."