CoreLogic report reveals strong gains in lower-priced homes
Home prices have continued to grow at a rate that exceeds long-term averages after adjusting for inflation, according to the latest S&P CoreLogic Case-Shiller Home Price Index.
The report for July showed a 5% annual gain in national home prices, slightly down from a 5.5% increase in the previous month, but still indicating steady growth in the market.
The 10-City Composite, which tracks home prices in major metropolitan areas, recorded a 6.8% annual increase, down from 7.4% in June. The 20-City Composite saw a 5.9% year-over-year gain, also slightly lower than the 6.5% recorded previously.
Month over month, the national index rose by 0.1%, while both the 10-City and 20-City composites saw no change before adjusting for seasonality. After seasonal adjustments, however, all three indices recorded slight increases, with the national index up by 0.2% and both the 10-City and 20-City indices rising by 0.3%.
"Accounting for seasonality of home purchases, we have witnessed 14 consecutive record highs in our National Index," said Brian Luke, head of commodities, real and digital assets. "While the S&P 500 has achieved 39 record highs and the S&P GSCI Gold TR hit 35 record highs, housing is following a similar trajectory.
“The growth has come at a cost, with all but two markets decelerating last month, eight markets seeing monthly declines, and the slowest annual growth nationally in 2024. Overall, the indices continue to grow at a rate that exceeds long-run averages after accounting for inflation."
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Among the cities tracked, New York posted the largest annual gain at 8.8%, followed by Las Vegas with 8.2% and Los Angeles at 7.2%. Meanwhile, Portland experienced the smallest growth, reporting a modest 0.8% year-over-year increase for the second consecutive month.
Luke also pointed out that lower-priced homes are performing better over the long term, particularly in markets like Tampa and New York.
"The low-price tier of Tampa was the best performing market nationally with 5-year performance of 88%,” he said. “The New York market was the best market annually, posting a gain of 8.9%. New York's low-tier index, which includes home values up to $533,000, helped drive that growth with 10.8% annual gains.”
Markets like New York and Atlanta have seen their low-tier indices outperform by as much as 20% and 18%, respectively, which benefits first-time buyers but also makes it more challenging for those hunting for starter homes.
The opposite is happening in California, according to the report. Higher-priced homes in California continue to see strong gains, particularly in cities like San Diego, Los Angeles, and San Francisco, where the high-price tiers, those over $1 million, outperformed the market on both 1-year and 3-year horizons.
“Regionally, the Northeast remains the best-performing market, with New York the top performer for three months running, followed by the Midwest region,” Luke added. “All markets in the Northeast and Midwest recorded an all-time high. The south reported the slowest gains regionally but included five of the seven best-performing markets since 2020."
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