US real estate prices rose 0.3 percent in July, but fell in some markets

According to First American's home price index, home prices rose 0.3% nationwide in July compared to June and 5.3% compared to July 2023.

According to First American, real estate prices are currently 55% higher than before the pandemic (February 2020).

However, the rate of appreciation has been slowing since around the beginning of 2024.

“July was the seventh consecutive month that annual home price growth slowed,” said Mark Fleming, chief economist at First American, in a statement. “Increased mortgage rates have pushed affordability to record lows, discouraging many buyers and prompting sellers to lock in the interest rate.”

“The combination of the extremely unaffordable market conditions and the rate lock-in effect has largely frozen home buying and selling, contributing to slowing but still positive appreciation,” Fleming says. “However, the prospect of Federal Reserve rate cuts this fall has already led to lower mortgage rates in August, which could prompt some buyers and sellers to act and reduce transaction volume in the market.”

In certain markets, prices continued to fall. Austin and Tampa, for example, have seen significant price declines in recent months.

“While the national home price trend is interesting, the real estate market is inherently local and prices are not rising in all markets,” says Fleming. “Annual price growth remains strong in top markets where demand continues to exceed supply or where relative affordability is an incentive, such as Anaheim, California and Pittsburgh.”

“In markets that are relatively affordable, homes remain more accessible compared to other major markets, making them attractive to buyers who cannot afford more expensive regions despite rising prices,” he adds. “In contrast, home prices in other markets are slowing significantly, with prices falling in cities like Austin, Texas, and Tampa, Florida.”

Photo: Gustavo Zambelli