According to Movoto Real Estate’s State of the Real Estate Market report, housing prices — as measured by the median list price per square foot — jumped a hefty 15% year-over-year in July, but remained steady month-over-month.
In other words, we have yet another sign housing’s red-hot run might be cooling off.
While the year-over-year data suggests a positive trend — 36 of the 38 cities posted an increased median list price per square foot compared to July of last year — that part of the recovery has already been baked into housing plays in the market.
Still, here’s Movoto’s city-by-city list of housing prices for those interested:
Looking more broadly, though, the month-to-month plateau seems to be a better indicator for what investors should expect in the second half of the year. The cooling trend is easy to see in the chart below, which came from the report, and which has more or less changed direction in tune with the Homebuilders SPDR (XHB).
While Movoto did mention that the plateau appears to be seasonally affected, it also expressed that the month-over-month pricing pattern will continue. Writes Movoto’s David Cross:
“The fact that the list price has not increased on a month-over-month basis indicates that the inventory supply is starting to catch up with demand. Going forward, we expect prices to continue to move laterally on a month-over-month basis. Higher mortgage rates and increased inventory will keep prices from increasing at the same pace we saw in the first half of the year.”
This is just the latest data point in a pile of disappointments, too. A few other recent headlines:
- June existing-home sales fell unexpectedly in June, according to a report in late July.
- June housing starts also dropped 9.9%, missing expectations.
- Homebuilders PulteGroup (PHM) and D.R. Horton (DHI) both stumbled last month as well after posting disappointing earnings.
The bottom line: Housing was hot to start off the year, but there’s more and more evidence that things won’t be sizzling again anytime soon.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.