Have US home prices peaked?

US home prices continued to accelerate at a record-breaking pace in June, with an 18.6% annual gain in the S&P CoreLogic Case-Shiller National Home Price NSA Index – the highest reading in more than 30 years.

This growth is also reflected in the 10- and 20-City Composites, which were up 18.5% and 19.1% year over year, respectively. Among the 20 cities, Phoenix’s 29.3% spike led all cities for the 25th consecutive month, with San Diego (+27.1%) and Seattle (+25.0%) close behind.

“Tireless home buyer demand pushed price growth to a new record high in June, with S&P CoreLogic national Case-Shiller Index clocking in an 18.6% year-over-year growth rate,” said CoreLogic deputy chief economist Selma Hepp. “While the housing market feels like it has legs that never get tired, inventory and affordability constraints are still expected to put a damper on price growth. Some early data suggests that the buyer frenzy experienced this spring is tapering, though many buyers still remain in the market.”

Read more: What does the pullback in pending home sales mean for the housing market?

Craig Lazzara, managing director and global head of index investment strategy at S&P DJI, added that June’s data were consistent with the pandemic-induced trend of potential buyers moving from urban apartments to suburban homes.

“This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years,” he said. “Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing.”

Hepp said that these shifts in the market suggest prices are likely peaking. She expects home price growth to ease off but to stay in double digits through year-end.