December 6, 2023
US Home Prices Continue Upward Trajectory in September
"Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation," Lawrence Yun, chief economist at the National Association of Realtors, said in a Nov. 21 news release.

Arpita Banerjee and Ronamil Portes | S&P Market Intelligence

US home prices continued their upward trend in September, reflecting a persistent shortage of housing inventory and high mortgage rates.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index, covering all nine US census divisions, rose 3.9% year over year in September, up from a 2.5% annual increase in the previous month after seasonal adjustment.

The 10-City Composite increased 4.8% year over year in September, up from a 3.0% annual increase in August. The 20-City Composite recorded an annual increase of 3.9%, up from a 2.1% increase in the previous month.

On a month-over-month basis, the US National Index, 10-City Composite and 20-City Composite each posted increases of 0.7% after seasonal adjustments.

“We’ve commented before on the breadth of the housing market’s strength, which continued to be impressive,” Craig Lazzara, managing director at S&P Dow Jones Indices, said in a Nov. 28 release. “Although this year’s increase in mortgage rates has surely suppressed the quantity of homes sold, the relative shortage of inventory for sale has been a solid support for prices.”

Among the 20 cities in the index, Detroit posted the highest price gain on a year-over-year basis at 6.7%, followed by San Diego at 6.5% and New York 6.3%. Three of the 20 cities posted lower prices year over year in September, with Las Vegas recording the highest price decline, at 1.9%, followed by Phoenix and Portland.

Mortgage rates cool in November

US mortgage rates continued to inch lower in November as Treasury market yields, which act as a benchmark for mortgage rates, declined due to cooling inflation.

The average US 30-year fixed conforming mortgage rate stood at 7.42% as of Nov. 27, a 17-basis-point decline from the 7.59% recorded on Oct. 27.

The average US 15-year fixed-conforming mortgage rate was 6.86% on Nov. 27, a 14-basis-point sequential decline.

Higher mortgage rates weigh on home sales

Existing home sales continued to decline in October, falling 4.1% month over month to a seasonally adjusted annual rate of 3.79 million units, according to data from the National Association of Realtors. Sales declined 14.6% from a year earlier.

“Prospective home buyers experienced another difficult month due to the persistent lack of housing inventory and the highest mortgage rates in a generation,” Lawrence Yun, chief economist at the National Association of Realtors, said in a Nov. 21 news release. “Multiple offers, however, are still occurring, especially on starter and mid-priced homes, even as price concessions are happening in the upper end of the market.”

All US regions posted year-over-year declines in existing home sales. The Northeast had the highest year-over-year decrease in existing home sales, at 15.8%.

On a month-over-month basis, existing homes sales in the Midwest remained unchanged at 930,000 units, while the other regions logged sequential declines.

In October, the median US existing-home price rose 3.4% year over year to $391,800, according to the National Association of Realtors.

New home sales declined 5.6% in October to a seasonally adjusted annual rate of 679,000 units, according to data from the US Census Bureau and the Department of Housing and Urban Development. However, this marked a 17.7% increase from the October 2022 estimate of 577,000 units.

The Northeast posted the highest sequential increase in new home sales, at 13.2%. The South logged the highest year-over-year increase in new home sales, at 19.2%.

Source:
S&P Global Market Intelligence

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