New Case-Shiller report highlights further proof of slowing home price gains

A maelstrom of headwinds continue to dent residential homes values, as evidenced by the newest S&P CoreLogic Case-Shiller Indices home price report.

Per the report, U.S. home price gains declined to 10.6% annually in September, down from 12.9% in August. September’s annualized increase is the lowest since December 2020 and marked the sixth consecutive month of slowing yearly gains.

“As has been the case for the past several months, our September 2022 report reflects short-term declines and medium-term deceleration in housing prices across the U.S.,” said Craig J. Lazzara, managing director at S&P DJI.

Prices are being hurt from two sides: still-increasing mortgage capital costs along with a waiting game for declining prices that are keeping buyers on the sidelines. Sellers, meanwhile, are reluctant to list their current residences and buy new homes at significantly higher rates than their current mortgages.

“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be more expensive and housing becomes less affordable,” Lazzara said. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”

The 10-city composite subindex, which tracks price growth in the country’s largest cities, registered a 9.7% annual gain in September, down from 12.1% the month prior. The 20-city composite index posted a 10.4% annual gain, down from 13.1% in the previous month. Both subindices have fallen substantially from their April 2022 peaks (19.8% for the 10-city index and 21.3% for the 20-city index).

“While the overall trend of stronger price gains in smaller markets continues to drive the 20-city index’s growth, slowing appreciation was slightly more evident in the 20-city index, as those areas tend to include more affordable markets that are being hit harder by declining buyer purchasing power,” wrote Selma Hepp, interim lead of CoreLogic’s office of the chief economist, on the company’s blog.

The cities with the strongest annualized gains in August saw repeat performances in September, topped by a 24.6% year-over-year jump in Miami. Tampa (up 23.8% annually), Charlotte (17.8%) and Atlanta (17.1%) turned in similarly strong growth, helping the Southeast (20.8%) turn in the highest yearly gain among all regions.


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