Year-over-year home price gains picked up in July as low inventory continued to boost appreciation, according to the latest Home Price Insights (HPI) report from CoreLogic.
Nationwide home prices, including distressed sales, increased by 2.5% annually, picking up steam after two straight months of 1.6% yearly growth. Annually, home prices have now risen for six straight months, bringing prices 5% higher at the end of July than they were when they hit their recent valley in February.
Month over month, prices grew 0.4%.
July’s big gain is more indicative of market conditions’ impact on prices from prior months rather than in the current landscape, according to CoreLogic chief economist Selma Hepp.
“Annual home price growth regained momentum in July, which mostly reflects strong appreciation from earlier this year,” she said. “That said, high mortgage rates have slowed additional price surges, with monthly increases returning to regular seasonal averages. In other words, home prices are still growing but are in line with historic seasonal expectations.
Nevertheless, the projection of prolonged higher mortgage rates has dampened price increase forecasts over the next year, particularly in less-affordable markets. But as there is still an extreme inventory shortage in the Western U.S., home prices in some of those markets should see relatively more upward pressure.”
Eleven states saw prices backtrack year over year, and all of them — Arizona, California, Colorado, Idaho, Montana, Nevada, Oregon, Texas, Utah, Washington and Wyoming — were west of the Mississippi. On the flipside, Vermont, at 8.5%, had the country’s highest yearly appreciation, followed by nearby New Hampshire and New Jersey, both at 7.3%, and Maine at 7.0%.
Among large cities tracked by CoreLogic, Miami continues to lead the field in annual appreciation by a large margin, with home prices gaining 9.0% between July 2022 and July 2023. Chicago saw a 4.2% price increase year over year, while Washington, D.C., realized a 2.7% annual gain. Las Vegas and Phoenix, which both saw large and rapid price increases during the pandemic as they drew homebuyers from pricier locales like California, are now seeing the biggest price slides, down 4.8% and 4.2% year over year, respectively.