US home prices have continued to rise this summer, reaching another all-time high. The S&P CoreLogic Case-Shiller home price index rose 5.4% in June from a year earlier, a record high, although the pace of growth has slowed compared to the previous month. The combined index of 20 major cities rose 6.5% in June, just shy of the 6.9% gain seen in May.
New York led the way in price growth, with prices up 9% year-over-year, followed by San Diego and Las Vegas, where prices rose 8.7% and 8.5%, respectively.
While rising borrowing costs typically push home prices down, that hasn’t been the case in the current environment due to a lack of supply. The 30-year fixed mortgage rate was around 7% in June.
Bank of America predicts that the price dynamics will continue until at least 2026. Fitch Ratings said in a recent report that home prices could rise 5% this year. The rise in home prices could accelerate once the Federal Reserve begins cutting rates.