Home prices are still higher than they were a year ago, but the gains are starting to ease up.
The S&P CoreLogic Case-Shiller national home price index shows that home prices rose 19.5% in September, down from a 19.8% annual gain in August. The annual gain has been decreasing since May 2020.
The 10-city index rose from a year ago, but not as much as in August. The 20-city index gained 19.1%, down from 19.6% in the previous month.
The cities with the highest price increases were Phoenix, Miami, and Tampa. Phoenix prices were up 33.1%, while Miami prices were up 25.2%. Six of the 20 cities reported higher prices in the year ending September 2021.
Chicago, Minneapolis and Washington D.C. had the smallest price gains, but the gains were still over 10%.
Craig Lazzara, managing director at S&P DOW JONES S&P, says that if he had to choose one word to describe the housing price data in September 2021, it would be degrading. The pace of price increases declined slightly in September.
Heavy investor activity and tight inventory are keeping prices elevated. It is unlikely that prices will fall as they did during the housing crash. The market is still expensive because of the supply and demand fundamentals.
The market has cooled since the beginning of the year, when dozens of competing bids, contingency waivers and price escalation clauses made home shopping difficult for first-time buyers. A growing number of homeowners are preparing to list in the next six months, which could mean an active winter season.
Mortgage rates are going up. According to Mortgage News Daily, the average rate on the 30-year fixed fell to a recent low of 2.78% at the start of August. It ended at 3.15%.
