US Home Prices Shatter Records Despite Indicators of Decline

Even though interest rates and inflation are still rising, a national housing price measure hit a new all-time high.

Even though the economy was terrible and interest rates were high, home prices in the US hit record highs in July, according to the S&P CoreLogic Case-Schiller house price index; this was reported on Tuesday by the parent company, S&P Dow Jones Indices.

The group's National Home Price NSA Index went up 1% year over year in July, and its 10-City Composite, which tracks big cities, went up 0.9%. The 20-City Composite increased by 0.1%, with gains in 19 places and faster growth in 18 compared to June.

All three measures went up from the previous month when they either went down or stayed the same.

Prices went up the most in Chicago, Cleveland, and New York City, even though people still leave those cities in large numbers. Chicago's prices increased by a massive 4.4% since July of last year, even though the city lost 100,000 people in 2022 alone, while Cleveland's prices only went up by 4%.

New York City had the third-highest price rise, at 3.8%, even though it has lost more than 468,200 people, or 5.3% of its population, since the start of the COVID-19 pandemic.

The most significant drops in housing costs were in Las Vegas (-7.2%) and Phoenix (-6.6%), big cities in an area that has been running out of water for years because of too much building.

The Federal Housing Finance Agency's most recent report showed that home prices increased even more in July than in July 2022, by 4.4%. Last week, the National Association of Realtors (NAR) said prices were up in all four parts of the country, even though sales were down by 15.3% in August compared to the same month in 2022.

The NAR's chief economist and other analysts have tried to explain the continued price increases in the face of rising interest rates and scary signs of a recession due to low inventory. They say that families with mortgages are reluctant to sell their homes in the current market because the rates they locked in when they bought their homes are much lower than current rates.

Craig Lazzara, the managing director of S&P DJI, said in the company's report that the "optimistic" view for home prices will continue to rise unless there is "general economic weakness" or another rise in mortgage rates.

President Joe Biden has said that he does not think a recession will occur during his time in office. He says this because the job market is strong, even though experts have admitted that inflation is rising faster than expected.