Home prices hit another record high this summer.
Meanwhile, the 20-city composite index rose 6.5% year-on-year in June, but fell short of the 6.9% increase in May.
New York led the group with prices increasing 9% year-over-year for the month, followed by San Diego and Las Vegas, which recorded price increases of 8.7% and 8.5%, respectively.
Rising mortgage rates also offset the month’s home price gains, with the 30-year fixed rate hovering near 7% in June. Home prices typically fall when borrowing costs rise, but a lack of supply is economically locking out homebuyers.
Home sales slumped over the summer as prices reached uncomfortable levels. Existing home sales fell 5.4% from May to June, according to previous data from the National Association of Realtors. Things have since improved, with the agency recently reporting that sales rose 1.3% in July.
Real estate developers have also been struggling recently, with U.S. construction hitting a four-year low in July and builder confidence hitting an all-time low in August as rising prices discourage consumers from buying new homes.
How long will this continue?
Bank of America predicted in June that price momentum would continue through at least 2026, with the market expected to rise 4.5% this year and 5% next year, respectively.
A recent report from Fitch Ratings said inflation could reach as much as 5% this year. The firm has previously noted that inflation could accelerate if the Federal Reserve starts cutting interest rates. The Case-Shiller index is up 4.6% since January.
