Home price growth drops to lowest level in two years

"U.S. home values have essentially stagnated after inflation, marking the third straight month of real housing wealth decline for homeowners. This reversal is striking: during the pandemic boom, home prices were climbing far faster than inflation, rapidly boosting homeowners' real equity. Now, the situation has flipped over the last year, owning a home yielded a modest nominal gain, but an inflation-adjusted loss."

"Both the 10-city and 20-city composite indexes also showed slower annual home price growth, with the 10-city dropping from 2.7% in June to 2.3% in July and the 20-city falling from 2.2% in June to 1.8% in July. In July, the indexes came in at readings of 361.64 for the 10-city and 341.95 for the 20-city. According to Godec, what is keeping price growth narrowly in the positive territory is the rebound that occurred earlier this year after the relative weakness of late 2024."

"Essentially, the market experienced a minor dip and recovery within a 12-month span, leaving us with little overall appreciation. This kind of volatile plateau stands in stark contrast to the roaring price surges of 2021, and it underscores just how decisively the market's momentum has cooled. New York continues to dominate the list, again claiming the title of highest annual price gain among the 20 cities examined with a 6.4% annual increase in July."

July data indicate the U.S. housing market has cooled sharply, with home values essentially stagnating after adjusting for inflation and marking a third consecutive month of real housing wealth decline. Pandemic-era rapid price gains have reversed: over the last year nominal home prices rose modestly but produced inflation-adjusted losses. Both the 10-city and 20-city composite indexes showed slower annual growth, with the 10-city falling from 2.7% to 2.3% and the 20-city from 2.2% to 1.8%, at readings of 361.64 and 341.95 respectively. A rebound early in 2025 offset weakness in late 2024, producing a volatile plateau rather than strong appreciation. New York led gains at 6.4%; Tampa fell 2.8%.

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