Home price growth slows, but still at all-time highs

New York City leads price increases for the fifth straight month

Home price growth slows, but still at all-time highs

New York City leads price increases for the fifth straight month

U.S. home prices rose at an annual rate of 3.9% in September, down from a 4.3% annual rate in the prior month, but it still was the 16th month in a row of all-time highs, according to the S&P CoreLogic Case-Shiller National Home Price Index.

The month-over-month national index, as well as the 20-city and 10-city composites, which track home prices in major U.S. cities, reversed their previous upward trend and declined in September. The national index fell 0.1% from August, while the 20-city index fell 0.3% and the 10-city index fell 0.4%.

On an annual basis, the 10-city composite index saw an increase of 5.2%, down from 6% in August. The 20-city composite index recorded a year-over-year increase of 4.6%, a decrease from a 5.2% increase in the previous month. For the fifth consecutive month, New York City reported the highest annual increase among the 20 cities, with a 7.5% rise in September. It was followed by Cleveland with a 7.1% jump, and Chicago, which was up 6.9%. Denver posted the smallest annual increase by rising a scant 0.2%.

“Home price growth stalled in the third quarter, after a steady start to 2024,” said Brian D. Luke, CFA, head of commodities, real & digital assets at S&P Dow Jones Indices. “The slight downtick could be attributed to technical factors as the seasonally adjusted figures boasted a 16th consecutive all-time high.”

Luke said that the index continues to show above-trend annual growth rates in the Northeast and Midwest, which grew at 5.7% and 5.4%, respectively. New York City, with its leading home-price growth, has been helping to push the Northeast ahead of all others in price increases since August 2023.

“The South reported its slowest growth in more than a year, rising 2.8%, barely above current inflation levels,” Luke said.

Voxtur’s chief valuation officer Ernie Durbin cautioned that the high home prices along with potential impact of President-elect Donald Trump’s proposals to increase tariffs could chill the housing market.

“While this might boost homeowners’ equity, these persistent hikes are making housing less affordable,” Durbin said in a statement. “We must closely monitor this index as the new Trump administration’s policies take effect. Implementing sweeping tariffs on imports could significantly raise the prices of new construction, further straining housing supply and affordability.”

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