Home prices rose in July as low supply continued to frustrate buyers.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, gained 1% from a year earlier in July, after holding steady the prior month.

On a month-over-month basis, the index increased a seasonally adjusted 0.6% in July.

Rising mortgage rates have pushed home-buying affordability near its lowest level in decades, reducing demand. But higher rates have also spooked potential home sellers who would need to give up their low mortgage rate and buy another home at a higher rate. The supply of homes for sale has remained unusually low, supporting home prices.

The median existing-home sale price rose 3.9% in August from a year earlier to $407,100, according to the National Association of Realtors.

The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay and reflects a three-month moving average. Homes usually go under contract a month or two before they close, so the July data is based on purchase decisions made earlier this year.

The index declined from June 2022 to January 2023 before starting to rise again on a monthly basis.

The increase in prices that began in January has now erased the earlier decline,” said Craig Lazzara, managing director at S&P Dow Jones Indices. “Although the market’s gains could be truncated by increases in mortgage rates or by general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”

The Case-Shiller 10-city index rose 0.9% over the year ended in July, following a 0.5% decrease in June. The 20-city index rose 0.1%, compared to a 1.2% decline in June.

Economists surveyed by The Wall Street Journal expected the 20-city index to increase 0.3%.

Chicago had the fastest annual home-price growth in the country, at 4.4%, followed by Cleveland, at 4%. The weakest market was Las Vegas, where prices fell 7.2% on an annual basis.

A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found a 4.6% increase in home prices in July from a year earlier. The FHFA index rose 0.8% in July from the prior month on a seasonally adjusted basis.

The post U.S. Home Prices Increased in July appeared first on Real Estate News & Insights | realtor.com®.