According to Realtor.com Research analyzing the S&P CoreLogic Case-Shiller Home Price Index, national home prices picked up momentum in July with year-over-year growth accelerating to 1.9%, a noticeable jump from the prior month's 1.6% gain. This marks the fifth straight month of accelerating growth, with larger metropolitan composites showing even stronger movement. The 10-city index posted a 3.4% annual gain while the 20-city index rose 2.5%, both improvements from the previous month.
The timing of these sales closings, which reflect transactions completed between May and July, occurred during a period when mortgage rates held fairly steady in the mid-6% range. However, the underlying housing market showed signs of weakness during this stretch. Existing-home sales dipped notably in August, and pending home sales remained well below year-ago levels, suggesting that buyer demand is facing headwinds even as some price momentum has returned.
What's particularly striking about this cycle is how dramatically different outcomes are playing out across the country. Chicago is leading the pack with a 6.9% annual price gain, while markets like Seattle are actually declining, posting a negative 1.6% year-over-year change. This nearly nine-point spread between the strongest and weakest performing cities shows just how fragmented this housing market really is, driven by local supply constraints and construction dynamics in each region.
Here's the catch that caught my eye: despite the acceleration in nominal price growth, home values continue to lose ground when adjusted for inflation. Real-estate values have been declining for fourteen consecutive months because inflation is running ahead of price gains. When you account for inflation running at 3.4%, those 1.9% price gains actually mean buyers and sellers are losing purchasing power in real terms.
Looking forward, the financing environment has become considerably more challenging since July wrapped up. Mortgage rates have climbed to 7.03%, and with the Federal Reserve raising rates for the first time since 2023, keeping those 7% rates looks likely heading into the fall months. If borrowing costs stay elevated, that spring acceleration in prices may not have legs to continue.
What I am seeing locally in the Bay Area and East Bay is that we're dealing with this same reality across all our markets: nominal gains that don't tell the whole story once you factor in what money actually buys. For sellers, those price increases feel real, but for buyers trying to build equity and for anyone thinking about whether now is the time to move, the inflation math matters just as much as what the listing price says.
