U.S. home prices kept rising in August before mortgage rates moved higher

Home price growth picked up again in August, though it still lagged inflation.

The S&P Cotality Case-Shiller 20-City Composite Home Price Index, which tracks prices in 20 of the country’s largest metropolitan areas, increased 2.65% in August, up from 2.47% in July.

The national index, which covers a wider set of cities, advanced 2.09%. These figures reflect transactions from June through August, before mortgage rates climbed above 7% and dampened sales.

The increases once again trailed inflation, which reached 3.4% in August amid higher gas prices. Adjusted for inflation, home prices have been declining for the past 15 months, even as they remain out of reach for many would-be buyers. The median home price reached $429,100 in August, according to National Association of Realtors data, the highest ever recorded for that month.

"Affordability … remains challenging," Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices, said in a statement. "With inflation at 3.4%, Brent crude near $100 per barrel and mortgage rates in the mid-to-high 6% range, households continue to face elevated costs alongside persistently high home prices."

Price trends also continued to differ sharply from city to city. Chicago home prices rose 6.7% in August, the strongest gain among major U.S. metro areas. New York posted a 6.2% increase, and Cleveland rose 4.3%, while Seattle saw a 2% decline.