US home prices continued to rise in May amid tight inventory and high mortgage rates.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index, covering all nine US census divisions, rose 5.9% year over year in May. This marks a deceleration from a 6.4% annual gain in the previous month.

The 10-City Composite increased 7.7% year over year in May, a slowdown from 8.1% in April. The 20-City Composite rose 6.8% year over year compared with a 7.3% annual gain in the previous month.

"While annual gains have decelerated recently, this may have more to do with 2023 than 2024, as recent performance remains encouraging," Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, said in a July 30 press release. "Our home price index has appreciated 4.1% year-to-date, the fastest start in two years."

On a monthly basis, the US National Index rose 0.3% in May after seasonal adjustment, unchanged from April. The 20-City Composite and 10-City Composite recorded monthly increases of 0.3% and 0.4%, respectively.

New York toppled San Diego in May, emerging with the highest annual home price gain among the top 20 cities, at 9.4%. San Diego landed the second position with a 9.1% annual gain, closely followed by Las Vegas, which recorded a price increase of 8.6%. Portland, Ore., again registered the lowest year-over-year price growth, at 1.0%.

"All 20 markets observed annual gains for the last six months. The last time we saw that long a streak was when all markets rose for three years consecutively during the COVID housing boom," Luke said. "The waiting game for the possibility of favorable changes in lending rates continues to be costly for potential buyers as home prices march forward."

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Mortgage rates decline in July

The average US 30-year fixed-conforming mortgage rate stood at 6.91% on July 29, down 4 basis points from 6.95% on July 1.

The average US 15-year fixed-conforming mortgage rate fell 6 basis points to 6.40% on July 29 from 6.46% on July 1.

Slowdown in home sales continues in June

Existing and new home sales declined in the US amid record-high home prices.

Existing home sales nationwide dropped 5.4% from a year ago and the previous month to a seasonally adjusted annual rate of 3.89 million units, according to data from the National Association of Realtors (NAR).

All four US regions registered monthly declines in existing home sales, with the Midwest recording the biggest dip, at 8.0%.

Sales declined year over year in three US regions, with the highest annual decline registered in the South. The West recorded no change in year-over-year existing home sales.

"We're seeing a slow shift from a seller's market to a buyer's market," Lawrence Yun, chief economist at NAR, said in a July 23 release. "Homes are sitting on the market a bit longer, and sellers are receiving fewer offers."

New home sales across the US fell 0.6% from the previous month and 7.4% year over year to a seasonally adjusted annual rate of 617,000 units, according to data from the US Census Bureau and the Department of Housing and Urban Development.

The Northeast region was the only one to record monthly and yearly declines in new home sales. The region logged a 63.6% year-over-year drop in sales.

Only the West logged yearly and monthly increases in new home sales. The Midwest region logged the highest annual growth in new home sales, at 32.8%.

Top mortgage lender

Pontiac, Mich.-based UWM Holdings Corp. was the top US residential mortgage lender with $26.65 billion in mortgages originated in the year through April, according to S&P Global Market Intelligence data.

Detroit-based Rocket Mortgage LLC originated $25.76 billion in mortgages through April 30.

Total residential mortgages originated so far this year stood at $625.15 billion as of April 30, up 1.6% year over year.