Home Price Growth Continues To Cool

Home price growth cooled for the second consecutive month in June as year-over-year gains inched down to 4.7%, according to new data from CoreLogic. This is down slightly from the 4.9% year-over-year gains in May.

However, June also marked the 149th consecutive month of annual growth. Month-over-month, home prices rose just 0.3% from May to June.

While no states posted annual home price declines in June, only South Dakota posted double-digit growth at 10%. Behind South Dakota, the other states with the highest increases year over year were New Jersey (9.3%), Rhode Island (9.2%), Connecticut (8.5%), and New Hampshire (8.2%).

Looking ahead, CoreLogic is forecasting the rate of growth to decrease by more than half of its current rate, with prices expected to grow by only 2.3% on a year-over-year basis next summer.

“Housing market activity essentially froze at the end of the spring homebuying season as high mortgage rates continued to compress affordability and dissuade potential homebuyers, said Dr. Selma Hepp, chief economist for CoreLogic. “The 0.3% gain in prices from the month before was less than half the increase seen between May and June prior to the pandemic, when the gains averaged 0.8%. In addition, cooling home prices continued to spread across more markets, and nine states reported a monthly decline, up from three states last month. 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.”