Yearly gain smaller than the previous month, suggesting growth is flattening
U.S. home prices remain significantly higher than a year ago, but the growth is easing and perhaps even ending, according to new figures.
U.S. home prices increased 19.5 percent year-over-year in September, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index released Tuesday. The year-over-year rise in home prices was just below the 19.8 percent annual rise in August.
“If I had to choose only one word to describe September 2021’s housing price data, the word would be ‘deceleration,’” said Craig Lazzara, managing director at S&P Dow Jones Indices.
September’s modest decrease in price growth compared to August is another indicator of slowing growth for buyers and sellers after four straight months of record-setting, increasing growth.
Two other Case-Shiller indices told a similar story. The 10-city composite rose by 17.8 percent on an annual basis, less than the 18.6 percent growth year-over-year in August. The 20-city composite rose by 19.1 percent, less than August’s 19.6 percent.
Month-over-month, the national index increased 1 percent before seasonal adjustment and 1.2 percent after seasonal adjustment. All metro areas in the 20-city index reported month-over-month increases after seasonal adjustments.
Lazzara pointed to buyers’ responses to the coronavirus pandemic as a reason for the housing market’s rise. But he said he is awaiting more data to determine if homebuying plans accelerated or location preferences have changed.
In September, Phoenix saw the highest year-over-year gain in home prices for the 28th consecutive month: 33.1 percent. Tampa placed second with 27.7 percent growth year-over-year, while Miami was third with a 25.2 percent rise.
The South (24.3 percent) and Sun Belt (24.2 percent) saw the strongest price growth among regions, all of which reported double-digit gains.
In total, Case-Shiller’s National Index is 46.9 percent higher than its previous peak in July 2006. The 10-city composite is 27.8 percent higher than the old peak, while the 20-city composite is 34.2 percent above its former apex.