In June, U.S. home prices registered a 4.7% year-over-year increase, continuing the trend of decelerating growth, according to the CoreLogic Home Price Index (HPI) and HPI Forecast released covering the month of June. This marks the second consecutive month where annual growth has stayed below 5%, a significant drop from the pre-pandemic norms.
CoreLogic, a global property information, analytics, and data-enabled solutions provider, indicated that the current cooling trend in the housing market is likely to persist. By summer 2025, home price growth is expected to slow to 2.3% year-over-year, less than half the current rate.
Month-over-month, home prices edged up just 0.3% from May to June, mirroring the subdued rate of increase forecasted for July 2024. This is significantly lower than the average 0.8% increase seen during the same period in pre-pandemic years, highlighting the impact of high mortgage rates on buyer affordability and market activity.
“High mortgage rates continue to compress affordability and dissuade potential homebuyers, essentially freezing market activity at the end of the spring home-buying season,” said Dr. Selma Hepp, CoreLogic’s Chief Economist. “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.”
Despite the overall slowdown, no states reported annual declines in home prices for June. South Dakota led the nation with a 10% year-over-year increase, the only state to post double-digit growth. Following South Dakota were New Jersey (9.3%), Rhode Island (9.2%), Connecticut (8.5%), and New Hampshire (8.2%).
Among the largest U.S. metros, Miami saw the highest year-over-year gain at 10%, surpassing San Diego and Las Vegas, which both posted 7.5% increases. Chicago followed closely with a 7.2% increase.
The sustained decline in the pace of home price appreciation is largely attributed to elevated mortgage rates. Although a rate cut by the Federal Reserve is anticipated in September, current high interest rates continue to strain affordability. Several Southern markets are also experiencing inventory increases, which are driving prices below last year’s levels.
“The April surge in mortgage rates notably weighed on consumer sentiment, and consumers are increasingly choosing to wait in anticipation of a lower mortgage rate environment later this year,” added Dr. Hepp.
As the housing market adjusts to these conditions, the coming months will reveal whether the anticipated rate cuts will indeed rejuvenate buyer activity and stabilize home price growth.
Top Takeaways:
- U.S. single-family home prices (including distressed sales) increased by 4.7% year over year in June 2024 compared with June 2023. On a month-over-month basis, home prices increased by 0.3% compared with May 2024.
- CoreLogic’s forecast shows annual U.S. home price gains relaxing to 2.3% in June 2025.
- Miami posted the highest year-over-year home price increase of the country’s 10 highlighted metro areas in June, at 10%. San Diego and Las Vegas came in second at 7.5%.
- Among states, South Dakota ranked first for annual appreciation in June (up by 10%), followed by New Jersey (9.3%) and Rhode Island (9.2%), No state recorded a year-over-year home price loss.
