U.S. home prices continue to rise for the seventh consecutive month, with an annualized increase of 2.6.

Home prices in the United States hit a new record in August as the affordability crisis continues to deepen. The national median home price rose 0.4 percent from July through August in seasonally adjusted data, the S&P CoreLogic Case-Shiller index showed Tuesday.

On an annualized basis, prices are up 2.6 percent from their peak last year, it noted. That marked the index's highest level since 1987. Composite home prices in 10 cities, including Los Angeles, Miami and New York, rose at a 3% annualized rate, up from 1% in July. The 20-city composite index, which also tracks home prices in Dallas and Seattle, jumped 2.2% in August, also up from a 0.2% increase from' 'previous month.

Together, there was a significant difference in price growth across the 20 cities, with Chicago posting a year-over-year increase of 5%, making it the city with the strongest performance for four consecutive months. Meanwhile, New York posted a 4.98% increase, followed by Detroit with a 4.8% increase.

According to a CNN report, the real estate market is sensitive to interest rates and was in a "deep freeze" last year following the Federal Reserve's aggressive campaign to raise interest rates. However, prices have recovered quickly as buyers adjust to high mortgage rates and' 'competing for a limited supply of housing.

The problem of real estate affordability does not appear to be solved in the near future. With mortgage rates continuing to remain near twenty-year highs, sellers who struck deals at low rates prior to the COVID-19 pandemic in early 2020 have been disinclined to sell, leaving few options for potential buyers. The number of affordable homes on the market by the end of July was down more than 9% from a year ago and down an astonishing 46% from the start of the pandemic, according to the latest report from Realtor.com.

Although the year-over-year rise in mortgage rates is definitely holding back housing demand, as after years of very low rates' 'supply availability is also strengthening,' Lazarra said." said Lazarra. "Unless higher rates or other events lead to overall economic weakness, the breadth and strength of this report is consistent with an optimistic view of future results. "