US home price growth slows in June

US home prices comtinued to rise year-on-year (YoY) in June, albiet at a slower pace than a month ago, as homebuying demand sagged in recent months.

A report released Tuesday by S&P Dow Jones Indices stated that the US home price index increased 1.9% YoY in June, marking the slowest pace of growth since summer 2023.

The report noted wide variations among US metropolitans, with New York leading the way with a 7% hike, followed by Chicago (+6.1%) and Cleveland (+4.5). This reflected a clear reversal of patterns that prevailed during the COVID-19 pandemic.

In contrary, housing markets in the South and West recorded price declines, most notably Tampa (-2.4%), San Francisco (-2%), and Dallas (-1%).

For the first time in years, home prices failed to keep pace with inflation, with the Consumer Price Index soaring 2.7% on an annual basis over the same period. This translated into a diminishing US household real estate wealth in real terms.

Nicholas Godek, head of fixed income and commodities at S&P Dow Jones, explained that the US housing market has entered a new phase of growth in line with inflation, in contrast to the exceptional gains it had experienced in 2020-2022.