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.