U.S. Home Prices Pace Higher, up 4.9% yr/yr in October – S&P CoreLogic Case-Shiller

The S&P CoreLogic Case-Shiller 20-city home price index in the US was up 4.9% yr/yr in October (consensus 5.0%) after increasing 3.9% in September. The Jump was the largest increase since November 2022 in line with market expectations. Supply continues to pressure prices despite higher interest rates with as a shortage of available homes for sale. Looking forward we have seen easing mortgage rates and the Federal Reserve signaling a slightly more accommodative stance in a so-called dovish pivot. This may potentially fuel further price appreciation in the coming months.

Annual returns of the U.S. National, 10-City Composite and 20-City
Composite Home Price Indices.

“U.S. home prices accelerated at their fastest annual rate of the year in October”, says Brian D. Luke, Head of Commodities, Real & Digital assets at S&P DJI. Our National Composite rose by 0.2% in October, marking nine consecutive monthly gains and the strongest national growth rate since 2022.”

S&P CoreLogic October 2023 Highlights

  • The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, showed a +4.8% annual change in October, up from a 4% change in the previous month.
  • The 10-City Composite showed an increase of 5.7%, up from a 4.8% increase in the previous month.
  • The 20-City Composite posted a year-over-year increase of 4.9%, up from a 3.9% increase in the previous month. Marking the largest increase since November 2022 and aligning with market expectations, as a shortage of available homes for sale has been pushing home prices higher.
  • Detroit maintained its position as the fastest-growing market for the second consecutive month, boasting an 8.1% annual gain, followed by San Diego (7.2%) and New York (7.1%).
  • Portland fell 0.6% and remained the only city reporting lower prices in October versus a year ago.
United States Case Shiller Home Price Index YoY
  • The S&P CoreLogic Case-Shiller 20-city home price index in the US rose by 0.1% month-over-month in October 2023, following a 0.2% increase in September and aligning with market expectations.
  • 11 of the 20 major metro markets reported month-over-month price increases.
  • Case Shiller Home Price Index MoM in the United States averaged 0.41 percent from 2000 until 2023, reaching an all-time high of 3.10 percent in March of 2022 and a record low of -2.80 percent in January of 2009.
United States S&P Case-Shiller Home Price Index
United States Case Shiller Home Price Index MoM

The Federal Reserve has pivoted towards lowering interest rates in 2024 potentially making mortgage financing less expensive.

“Home prices leaned into the highest mortgage rates recorded in this market cycle and continued to push higher. With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation.”

Sources: S&P Dow Jones and Core Logic

Location Changes Year on Year

“Detroit kept pace as the fastest growing market for the second month in a row, registering an 8.1% annual gain. San Diego maintained the second spot with 7.2% annual gains, following by New York with a 7.1% gain. We are experiencing broad based home price appreciation across the country, with steady gains seen in nineteen of twenty cities. This month’s report reflects trendline growth compared to historical returns and little disparity among cities and regions.”

Brian D. Luke, Head of Commodities, Real & Digital assets at S&P DJI.

“Each of our 10-city, 20-city and National Index, remain at all-time highs, with 8 of 20 cities registering all-time highs (Miami, Atlanta, Chicago, Boston, Detroit, Charlotte, New York and Cleveland). While Portland remains slightly down compared to last year’s gains, Phoenix and Las Vegas have flipped to year over year gains. The Midwest and the Northeast region are fastest growing markets, while the Southwest and West regions have lagged other regions for over a year. A solid, if unspectacular report, this month’s index reflects a rising tide across nearly all markets.”

“Home prices in the U.S. began to fall after June 2022, and May’s data bolster the case that the final month of the decline was January 2023. Granted, the last four months’ price gains could be truncated by increases in mortgage rates or by general economic weakness. But the breadth and strength of
May’s report are consistent with an optimistic view of future months.

FHFA House Price Index October 2023 Highlights

The FHFA Housing Price Index rose 0.3% m/m in October after increasing a revised 0.7% (from 0.6%) in September.

Source: S&P Global

From The TradersCommunity News Desk