Home-price growth slowed in June, as the S&P CoreLogic Case-Shiller Home Price Index reported that prices rose just annually 3.1% in June—a decline from 3.3% growth in May.
Also falling were price gains in 10-city composite, which dropped from 2.2% to 1.8% in June. The 20-city composite posted a 2.1% annual gain, down from 2.4% the prior month.
“While falling mortgage rates have thus far only led to an increase in refinancing, rather than purchase activity, there will undoubtedly be a large boon to the marginal homebuyer,” said Ralph B. McLaughlin, Deputy Chief Economist and Executive of research and insights for CoreLogic. “Thus, we should expect the lengthy slowdown in home price growth to flatten or even tick upwards by the end of the year assuming the U.S. economy avoids any present-day threats of a recession.”
Phoenix overtook Las Vegas for the market with the highest annual price growth at 5.8%. Home prices in Las Vegas grew year-over-year by 5.5% and Tampa Bay followed with a 4.7% increase. Atlanta, Georgia, and Detroit, Michigan, were close behind with annual growth at 4.5% and 4.2%, respectively.
Six of the 20 cities in the composite reported higher price increases against the prior month.
The Federal Housing Finance Agency (FHA) also reported Tuesday that home prices in Q2 2019 rose 1% and are 5% higher when compared to Q2 2018. Home prices have risen for 32-consecutive quarters across the nation, and have increased in every state over the past year. Idaho's 11.4% appreciation is highest in the nation, followed by Utah (7.7%); Tennessee (7.2%); Georgia (6.9%); and Arizona (6.9%).
Realtor.com’s Senior Economist George Ratiu called home price gains in June “sluggish,” and said that some buyers have been priced out of the market and others expanded their search to more affordable neighborhoods.
“Although recent economic news has prompted discussion of an impending recession, there’s a silver lining for buyers: more buying power,” Ratiu said. “As we head into the fall season, buyers can expect to see their dollar stretch further due to the downward trend in mortgage rates, as well as the seasonal slowdown in home prices.”
Ratiu added that a recent realtor.com report showed that 47% of millennial prefer small towns and rural areas, with 34% looking into living in the suburbs, compared to 16% looking to purchase homes in urban areas.