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Economic Report: U.S. home prices fell in July, as mortgage rates approach 7%


The numbers: The S&P CoreLogic Case-Shiller 20-city house price index rise slowed to 16.1% year-over-year in July, a lower rise than the 18.7% jump in the previous month. 

In the month of July, the 20-city index fell a seasonally adjusted 0.4% down from a rise of 0.4% in June. That’s the first time since March 2012 that the 20-city index fell.

The rate of price rises has sharply slowed since reaching a peak of 21.2% in April. 

A broader measure of home prices, the national index, fell a seasonally adjusted 0.2% in July from June.

July’s monthly fall was the first time the national index fell on a monthly basis since February 2012.

A separate report from the Federal Housing Finance Agency showed home prices falling 0.6% in July, from June, down from a 0.1% gain the prior month. 

And over the last year, the FHFA index was up 13.9%.

Key details: All 20 cities reported lower home price increases year-over-year.

Tampa, Miami, and Dallas reported the highest year-over-year gains among the 20 cities in July. Price growth was strongest in the South and Southeast, by over 26% year-over-year, S&P said.

Only seven cities reported an increase in home price growth in July, as compared to the previous month.

San Francisco, Seattle, and San Diego also reported home prices falling the most month over month.

Big picture: Economists and real-estate companies have stressed that price rises have decelerated considerably.

A big part of the deceleration that continues from earlier this year is due to higher mortgage rates.

The average on the 30-year fixed-rate mortgage was at 6.29% last Thursday, according to Freddie Mac. Last year around the same time, that rate was at 3.41%. Rates are as of Tuesday at 6.87%, according to Mortgage News Daily.

The market’s also affected by economic uncertainty, with buyers looking to wait and sellers hoping to sell before demand falls further.

What the producers of the report said:  “July’s report reflects a forceful deceleration,” Craig J. Lazzara, managing director at S&P DJI, said in a statement.

The fall in year-over-year price rises between June and July was the “largest deceleration in the history of the index,” he added.

And he warned that prices will likely continue to decelerate given mortgage rates are inching towards 7% and with prices continuing to be elevated, causing affordability challenges.

What are they saying? “The cooling has come fast and hard,” Stephen Stanley, chief economist at Amherst Pierpont, wrote in a note. “Cities in the West posted the steepest increases during the pandemic, and they are reversing hard now.”

The slowdown in home price growth “which is spreading beyond the West Coast markets” is expected and will make homes more affordable and in line with income growth, Selma Hepp, deputy chief economist at CoreLogic &SP Case-Shiller said in a statement.

“Returning to long-term average of 4 to 5% price growth is closer than initially anticipated,” she added, which is expected by early 2023.


Change from June to July

San Francisco




San Diego


Los Angeles


















Las Vegas


New York
















Market reaction: The Dow Jones Industrial Average

and the S&P 500

were up in early trading on Tuesday. The yield on the 10-year Treasury note

rose above 3.8%.

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