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U.S. home prices are rebounding — almost all the way back to record highs last year

Housing prices have gone up overall in the East and dropped in the West over the past 12 months, index finds

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A for sale sign is pictured in Salt Lake City.

A for sale sign is pictured in Salt Lake City on Monday, Aug. 28, 2023.

Kristin Murphy, Deseret News

U.S. home prices have climbed for five consecutive months and are just below their all-time high from a year ago.

That’s according to the latest reading of the S&P CoreLogic Case-Shiller Index, the leading measure of U.S. home prices. Data released Tuesday from June show all 20 major metro housing markets reported month-over-month price increases, marking the fifth straight month of gains.

“U.S. home prices continued to increase in June 2023,” Craig J. Lazzara, managing director at S&P DJI, said in a prepared statement. “Our National Composite rose by 0.9% in June, and it now stands only -0.02% below its all-time peak from exactly one year ago.”

Seasonally adjusted, the Case-Shiller U.S. National Composite Home Price Index posted a month-over-month gain of 0.7%, while the 10-City and 20-City composites both posted increases of 0.9%. The 10- and 20-city composites now stand 0.5% and 1.2%, respectively, below their June 2022 peaks.

“As we’ve noted previously, the recovery in home prices is broadly based,” Lazzara said. “Prices rose in all 20 cities in June, both before and after seasonal adjustment. Over the last 12 months, 10 cities show positive returns. Otherwise said, half the cities in our sample now sit at all-time high prices.”

As the U.S. real estate market continues to grapple with today’s new reality of high mortgage interest rates — these days hovering over 7% — the national housing market correction has been largely divided east to west. In the East, home prices have been quicker to post gains, while the West saw more dramatic price drops.

“Regional differences continue to be striking,” Lazzara said, noting June’s three best-performing cities with year-over-year gains were Chicago (up 4.2%), Cleveland (up 4.1%) and New York, (up 3.4%). The worst performers continue to be in the Pacific and Mountain time zones: San Francisco (down 9.7%) and Seattle (down 8.8%).

“The Midwest (+2.8%) continues as the nation’s strongest region, followed this month by the Northeast (+1.6%). The West (-5.9%) remains the weakest region,” Lazzara said.

Now halfway through 2023 and after five straight months of increasing home prices, the Case-Shiller U.S. National Composite Home Price Index has risen 4.7%, slightly above the median full calendar year increase in more than 35 years of data, Lazzara said.

“We recognize that the market’s gains could be truncated by increases in mortgage rates or by general economic weakness,” Lazzara acknowledged, “but the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

The Case-Shiller reading echoes similar sentiments that predict a positive outlook for the U.S. housing market. Firms like Zillow,  CoreLogic and AEI Housing Center believe home prices have bottomed, Fortune reported. However, firms including Moody’s Analytics and Morgan Stanley have a more bearish outlook, predicting home prices could dip again sometime between now and the end of 2024.