Home prices continue to rise even as low inventory and high mortgage rates are keeping first-time and repeat homebuyers out of the market, but the pace of appreciation is starting to cool.
That’s according to CoreLogic’s Home Price Index report, released Tuesday, which shows that annualized home-price growth in June slipped below 5% for the second consecutive month. Prices rose 0.3% from May to June, which is less than half the average growth rate of 0.8% recorded during the same period prior to the COVID-19 pandemic.
“Housing market activity essentially froze at the end of the spring home-buying season as high mortgage rates continued to compress affordability and dissuade potential homebuyers,” CoreLogic chief economist Selma Hepp said in a statement.
“In addition, cooling home prices continued to spread across more markets. The April surge in mortgage rates notably weighed on consumer sentiment, and consumers increasingly chose to respond to the anticipation of a lower mortgage rate environment later this year.”
Geographically, South Dakota posted the highest rate of year-over-year price growth at 10%. Behind the Mount Rushmore State were New Jersey (9.3%), Rhode Island (9.2%), Connecticut (8.5%) and New Hampshire (8.2%). At the opposite end of the spectrum, Texas and Louisiana each posted gains of less than 1%, while Oregon, Wyoming, Utah, Colorado, Minnesota and Arkansas posted gains of 1% to 3%.
At the metro level, Miami posted the highest annualized gain in June at 10%, followed by San Diego and Las Vegas at 7.5% and Chicago at 7.2%. Houston (1.7%) and Denver (1.9%) continue to grow at more sluggish rates.
Looking forward to July, the CoreLogic index forecasts slower growth of 0.3% month over month and 2.3% year over year.
