October home price growth slows for fourth straight month: Case-Shiller

October home price growth slows for fourth straight month: Case-Shiller

October home price growth slows for fourth straight month: Case-Shiller

Home price growth slowed in October, reflecting higher mortgage rates and a difficult buyer environment. (one)

Annual home price growth slowed further in October as higher mortgage rates continued to test homebuyer affordability, according to the latest S&P CoreLogic Case-Shiller Indexes report.

US home prices rose 9.2% annually in October, compared with September’s 10.7% annual increase, according to Case-Shiller’s National Home Price NSA Index. Home prices have fallen 3% since the market peaked in June 2022.

“October 2022 was the fourth consecutive month of falling home prices in the US,” said Craig Lazzara, managing director of S&P Dow Jones Indices. “As the Federal Reserve continues to raise interest rates, mortgage financing continues to be a headwind for home prices.

“Prices may well fall further given the ongoing prospects of a challenging macroeconomic environment,” Lazarra continued.

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This city saw the biggest price gains

According to the report, house prices fell nationwide on a monthly basis in October. The national home price index fell 0.5% month-on-month and the 10-city and 20-city composites fell 0.7% and 0.8%, respectively. Both are 4.6% below June prices.

“Despite significant regional differences, all 20 cities in our October report reflect these trends of near-term declines and medium-term slowdowns,” Lazarra said. “Prices fell in every city in October, with a median change of -0.9%. Year-on-year price increases were lower in all 20 cities in October than in September; 20 cities was 8.3%.”

The city with the highest price increase was Miami, where home prices rose 21% annually. Tampa and Charlotte followed with gains of 20.5% and 15%, respectively. Prices are also higher in Atlanta, up 14.9% in October.

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Mortgage rates continue to test affordability

High mortgage rates and inflation continued to be barriers to entry for homebuyers. Existing home sales have fallen for ten straight months, showing that “homebuyers are drained,” Realtor.com said in a statement.

This fall in demand is driving the monthly slowdown in home price growth.

“Even as potential sellers pull away from listing their properties, the number of homes for sale is growing, as is the number of days a home sits on the market waiting for a buyer,” said George Ratiu, Senior Economist of Realtor.com. said in a statement. “With fewer buyers and a growing inventory of discounted offers, the median price continues to deviate from its peak.

“Buyers and sellers are taking a wait and see approach to the markets, keeping an eye on the direction of the economy,” Ratiu continued. “A soft landing in 2023, assuming the Fed successfully reins in inflation without hurting employment, could provide a better foundation for economic and real estate activity. However, the downside risks are on the horizon.”

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