US Home Prices Reach Another High in September, With Eight Months of Increases

So far in September, the national composite index of house prices across the US has gone up by 6.1%, much higher than the usual yearly growth.

 CNN reported from Washington, DC --

 Data released on Tuesday revealed that US home prices had increased yet again, achieving a new peak and indicating a trend of consecutive months of growth that had been ongoing since the beginning of the year.

 In September, when mortgage rates remained higher than 7%, the historically low supply of homes was still causing the cost of buying a house to rise.

 The S&P CoreLogic Case-Shiller US National Home Price Index revealed a 0.7% increase in prices during the month of September when compared to the preceding month, as per seasonally adjusted data.

 The national composite index increased by 3.9% from the same time the previous year, according to the data from September 2022.

 In October, sales of new homes experienced a decline due to elevated mortgage rates. This was reported by the Department of Commerce on November 27, 2023.

 In October of 2023, sales of new homes dropped due to mortgage rates reaching a peak for the year.

 For the year up until September, the US composite, which covers the nine divisions of the census, has gone up by 6.1%. This is considerably higher than the average annual growth over the 35 year period that S&P has been monitoring the figures.

 Craig Lazzara, managing director of S&P Dow Jones Indices, stated that even though mortgage rates have risen this year, resulting in fewer homes being sold, the shortage of inventory on the market has served as a stabilizing factor for prices.

 He suggested that, barring any major economic downturn, prices should remain strong and constant in the foreseeable future.

In which areas have home prices reached their peak?

 In a seasonally adjusted index, every single one of the 20 cities posted a price rise for the month of September and prices in 17 cities exceeded that of September 2022.

 September saw home prices reach new peaks in a few cities, such as Atlanta, Boston, Charlotte in North Carolina, Chicago, Cleveland, Detroit, Miami, New York and Tampa, Florida.

 September saw the largest year-on-year increases in housing prices in Detroit (6.7%), San Diego (6.5%), and New York (6.3%).

 Las Vegas saw the largest decrease in prices from September 2022, with a dip of 1.9%, followed by Phoenix with 1.2%, and lastly Portland, Oregon, at 0.7%.

 In September 2022, the Northeast and Midwest experienced price increases of over 5%, making them the strongest regions in the nation. The West, however, remains the weakest as prices have dropped compared to the same time last year.

Low stock levels are causing a surge in prices

 Hannah Jones, a senior economic research analyst at Realtor.com, pointed to the recent Case-Shiller index as evidence of the robust demand for housing and the limited supply, indicated by the ongoing surge in home prices into the early fall.

 The figures for September followed the same trend as the figures from July and August, she noted, with mortgage rates steadily increasing from 6.8% in the start of July to 7.3% by the end of September.

 In September, the combination of higher prices and increased mortgage rates caused an alarming decrease in affordability for aspiring homeowners, causing existing home sales to plunge to a 13-year low. Additionally, the limited availability of homes kept prices relatively high.

 According to Jones, this caused some purchasers to look for other options in the new home market. Data revealed that new home sales increased 33.9% year over year in September.

 Jones noted that as new home sales increased, the number of new homes to choose from also expanded to make up a greater portion of the total inventory. In September, almost one third of the homes available were newly constructed, which is nearly two times the pre-Covid-19 share.

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