Welcome news for buyers: Home price spike slows

Home prices are still rising, but at a slower pace.

Why it matters: Home prices factor into major inflation gauges like the Consumer Price Index but with a significant lag.

• Still, it's a sign that there's less price pressure in the pipeline.

The latest: Two key indexes released Tuesday told a similar story about housing inflation returning to a simmer, a welcome development after the way it boiled over in 2021 and 2022.

• The FHFA index of home prices showed an increase of 3.0% over the prior year in June, the most recent data available.
• Separately the S&P CoreLogic Case-Shiller index of the 20 largest housing markets showed a 1.2% decline in June, compared to the prior year.

Yes, but: As any homebuyer can tell you, affordability is a question of home prices and mortgage interest rates — not to mention taxes and insurance.

The bottom line: With mortgage rates now above 7%, and home prices continuing to rise — albeit at a slower pace — Americans are facing the least affordable housing market in almost 40 years.