Home Prices in September Decelerate for Fifth Month says S&P CoreLogic Case-Shiller

Home prices in the US rose 10.4% from a year earlier in September 2022, the least since December 2020 and below market forecasts of a 10.8% increase according to the CoreLogic Case-Shiller 20-city home price index. It has been the fifth consecutive deceleration in the growth since rapid increases in mortgage rates since the start of the year has made home ownership far less affordable. All 20 cities reported lower price increases.  The FHFA House Price Index (M/M) rose 0.1% in September (est -1.2%; prev -0.7%) and the House Price Purchase Index (Q/Q) Q3: 0.1% (prevR 3.7%).

S&P CoreLogic September 2022 Highlights

  • US S&P CoreLogic CS 20-City (M/M) SA Sep: -1.24% (est -1.20%; prevR -1.30%)
  • US S&P CoreLogic CS 20-City (Y/Y) SA Sep: 10.43% (est 10.55%; prevR 13.06%)
  • US S&P CoreLogic CS US HPI (M/M) SA Sep: 10.65% (prevR 12.88%)
United States S&P Case-Shiller Home Price Index
United States Case Shiller Home Price Index MoM
United States Case Shiller Home Price Index YoY

FHFA House Price Index September 2022 Highlights

  • US FHFA House Price Index (M/M) Sep: 0.1% (est -1.2%; prev -0.7%)
  • US House Price Purchase Index (Q/Q) Q3: 0.1% (prevR 3.7%)
United States FHFA House Price Index MoM
United States FHFA House Price Index YoY

Homes usually go under contract a month or two before they close, as such the August data reflects purchase decisions made earlier in the year, when interest rates weren’t as high as they are now. The Federal Reserve continues to raise interest rates making mortgage financing more expensive. We saw 30-year fixed-rate mortgage over 7% in the past few weeks, up from 2.88% from a year earlier.

The forceful deceleration in U.S. housing prices that we noted a month ago continued in our report for August 2022,” says Craig J. Lazzara, Managing Director at S&P DJI.

“For example, the National Composite Index rose by 13.0% for the 12 months ended in August, down from its 15.6% year-over year growth in July. The -2.6% difference between those two monthly rates of change is the largest deceleration in the history of the index (with July’s deceleration now ranking as the second largest).

We see similar patterns in our 10-City Composite (up 12.1% in August vs. 14.9% in July) and our 20-City Composite (up 13.1% in August vs. 16.0% in July). Further, price gains decelerated in every one of our 20 cities. These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since.

Location Changes

“Month-over-month comparisons are consistent with these observations. All three composites declined in July, as did prices in every one of our 20 cities. On a month-over-month basis, the biggest declines occurred on the west coast, with San Francisco (-4.3%), Seattle (-3.9%), and San Diego (-2.8%) falling the most.

“Despite the ongoing deceleration, August’s housing prices remain well above year-ago levels in all 20 cities. Florida continues to hold the top two spots, with Miami (+28.6%) taking the lead over Tampa (+28.0%). This month, Charlotte (+21.3%) edged out Dallas (+20.2%) and Atlanta (+20.1%) for third position. Price growth continued strongest in the Southeast (+24.5%) and South (+23.6%).

The deceleration in U.S. housing prices that we began to observe several months ago continued in
August 2022.

“As the Federal Reserve continues to move interest rates upward, mortgage financing has become
more expensive, a process that continues to this day. Given the prospects for a more challenging
macroeconomic environment, home prices may well continue to decelerate.”

Source: homeprice-release-1025.pdf (spglobal.com)

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