Home prices hit a new record in June, increasing more than 5% nationally when compared with the previous year.
On a three-month running average, national home prices in June were 5.4% higher than they were a year ago, according to the S&P CoreLogic Case-Shiller US National Home Price Index. Home prices are now the highest ever recorded in US history.
"The upward pressure on home prices is making this the most unaffordable housing market in history. First-time and moderate-income home buyers, in particular, increasingly are being left out of the housing market," Lisa Sturtevant, Bright MLS chief economist, told the New York Post.
Despite this, home prices only climbed 0.2% on a monthly basis and are down from the 5.9% pace of year-over-year gains recorded in May.
Where Home Prices Posted the Highest Gains
The index tracking home prices in 20 of the largest cities in the US gained 0.4% in June from May. On an annual basis, home prices jumped 6.5% compared to last June.
Among the 20 largest metro areas tracked by Case-Shiller, New York had the highest year-over-year gain, with home prices increasing by 9%. It is followed by San Diego, with an annual increase of 8.7%, and Las Vegas with a year-over-year gain of 8.5%.
On the other hand, Portland, Oregon, saw the smallest gain of the top 20 cities, with prices increasing only 0.8% from a year ago.
It is important to note that the Case-Shiller index has a two-month delay in its reporting.
The recent increase in home prices came even as mortgage rates soared to 7.5% in April and stayed in that range through June. Typically, home prices fall when mortgage rates rise.
There are several reasons why home prices are continuously increasing. For instance, years of underbuilding have led to a shortage of homes in the country. This was further exacerbated by the homebuying boom during the COVID-19 pandemic, a rapid rise in mortgage rates, and expensive construction materials.
In addition, home sellers who bought a home at a record-low mortgage rate of 3% or less during the COVID-19 pandemic are now reluctant to sell. This further limits supply and leaves fewer options for potential buyers.
