Prices for existing single-family houses across the United States hit their 15th consecutive record high, but economists say there are signs of slowing growth.
The cost of those houses increased 4.2% from a year earlier in August, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index. August’s data also marks the fifth consecutive month that the growth in prices has slowed, and it’s the slowest rate of annual growth since 2023.
It's a signal that home prices are “beginning to show signs of strain,” according to Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices.
A second price index released Tuesday found the same growth rate. The Federal Housing Finance Agency’s House Price Index showed that compared to the same time a year earlier, prices increased 4.2% in August. Compared to the previous month, house prices climbed 0.3%.
Even so, the continued growth in home prices coupled with a recent uptick in mortgage rates has kept some prospective homeowners sidelined from the market. But the price data released Tuesday arrives lagging behind current conditions. The report uses data from June, July and August, so it doesn’t fully account for the Federal Reserve’s September rate cut and the succeeding economic data reports that have driven mortgage rates higher.
Despite that lag, there are other seasonal disruptions that could be factored into the latest month’s data.
For one, the switch from summer to fall could have caused some pullback from buyers, keeping prices from growing faster, according to Luke. “As students went back to school, home price shoppers appeared less willing to push the index higher than in the summer months,” he said in a statement.
Regional differences
The index also measures city-level price growth with a 10-city and 20-city index. Both of those indexes increased annually in August.
On an annual basis, all metropolitan markets saw positive price changes on a year-over-year basis, but compared to July, it was cheaper to buy a house in August in all 20 markets.
Of the 20 cities included in the index, Denver had the slowest annual price growth, pushing Portland out of a spot its held since the spring. New York, Chicago and Las Vegas saw the fastest growth, and they are the only three cities to clock all-time high prices.
Economists have also noticed a regional trend taking hold as price growth slows more in the the South and West than in the North and Midwest regions.
“The tale of two regions reflects significant affordability challenges in the West and South, where home price surge in recent years and high mortgage rates priced out many potential buyers,” Selma Hepp, CoreLogic’s chief economist, said in a statement. “The Northeast and Midwest continue to benefit from relative affordability and less collective increase in prices over the last few years, but also more limited for-sale inventory.”