New home sales dipped in June, a sign of the lingering effects of elevated US interest rates
AFP

Home prices reached their highest level in the history of the S&P CoreLogic Case-Shiller U.S. National Home Price Index. The mark came in spite of rising mortgage interest rates that have slowed activity.

The data, released by S&P on Tuesday, determined the average price over a three-month period from April to June, showing that prices nationally were 5.4% higher compared to the same end-month the previous year. While it may be a record-high for home prices, the annual gain was lower than the 5.9% in May.

The average home prices in the 10-city composite increased by 7.4% annually. The figure was down from the previous month's 7.8%. On the other hand, in a 20-city composite, the rate was 6.5% higher year over year, which was actually down from May's increase of 6.9%, CNBC reported

"The upward pressure on home prices is making this the most unaffordable housing market in history," said Bright MLS chief economist Lisa Sturtevant.

"First-time and moderate-income home buyers, in particular, increasingly are being left out of the housing market," she said in NY Post.

In a release, Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, stated that the gap between housing and inflation is larger.

"While both housing and inflation have slowed, the gap between the two is larger than historical norms, with our National Index averaging 2.8% more than the Consumer Price Index," said Luke.

"That is a full percentage point above the 50-year average. Before accounting for inflation, home prices have risen over 1,100% since 1974, but have slightly more than doubled (111%) after accounting for inflation," he added further.

Out of the 20 cities, it was New York that showed the highest annual gain. Prices in NY rose up to 9% in June. Next was San Diego with an annual increase of 8.7%. Next to San Diego was Las Vegas, which showed 8.5%.

Home values were also shown by price tier in the most recent report. By perusing the large markets over the past five years, it discovered that 75% of the markets showed that low-price tiers rise faster.

"New York's low tier has the largest five-year out-performance, rising nearly 20% above the overall New York region," Luke said in the release.

"New York also has the largest divergence between low- and high-tier prices. Conversely, San Diego has seen the largest appreciation in higher-tier homes over the past five years," he further added.