Case-Shiller: Home Price Deceleration May Have Ended in September


U.S. home prices increased yet again in September – but the overall rate of appreciation continued to slow.

Home prices increased 0.4% on an adjusted basis compared with August and were up 3.2% compared with September 2018, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.

The index’s 10-city composite posted a 0.2% increase, month-over-month, while the 20-city composite posted a 0.4% increase.

On an unadjusted basis, U.S. home prices increased 0.1% in September compared with August.

The 10-city composite was flat compared with the previous month, on an unadjusted basis, while the 20-city composite posted a 0.1% increase.

Phoenix, Charlotte and Tampa reported the highest year-over-year gains among the 20 cities. In September, Phoenix led the way with a 6.0% year-over-year price increase, followed by Charlotte at 4.6% and Tampa at 4.5%.

Ten of the 20 cities reported greater price increases in the year ended September versus the year ended August. 

“September’s report for the U.S. housing market is reassuring,” says Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a statement. “The national composite index rose 3.2 percent relative to year-ago levels, with smaller increases in [the] 10- and 20-city composites. Of the 20 cities in the composite, only one – San Francisco – saw a year-over-year price decline in September.”

Lazzara notes that home prices increased at a slightly higher rate in the 20 cities in September, compared with the previous month.

“After a long period of decelerating price increases, it’s notable that in September both the national and 20-city composite indices rose at a higher rate than in August, while the 10-city index’s September rise matched its August performance,” he says. “It is, of course, too soon to say whether this month marks an end to the deceleration or is merely a pause in the longer-term trend. 

“At a regional level, Phoenix retains the top spot for the fourth consecutive month with September’s six percent year-over-year gain,” Lazzara adds. “The Southeast region was also strong, as Charlotte, Tampa, and Atlanta all rose at greater than a four percent clip.”

Ralph McLaughlin, deputy chief economist and executive of research and insights for CoreLogic, adds that “while stubbornly low mortgage rates have put the kabash on the great housing market cooldown, the boom and bust patterns of home price growth in West appear to be now solidly on the bust side.”

“Both San Francisco and Las Vegas – once emblems of the housing market gold rush – have turned into ghost towns, relatively speaking, over the past year,” McLaughlin says. “While not great news from new homeowners, first-time buyers looking to get their foot in the door of homeownership might have something new to be thankful for this holiday season.”

The Federal Housing Finance Agency (FHFA) also released its home price index today, showing the home prices increased 0.6% in September compared with August.

The FHFA report – which uses a different methodology and is based on home price data from Fannie Mae and Freddie Mac – shows that U.S. home prices increased 4.9% from the third quarter of 2018 to the third quarter of 2019.

“House prices have risen every quarter for the last eight years,” says William Doerner, supervisory economist for the FHFA, in a statement. “Relative to a year ago, market indices are still trending upward for the nation as a whole as well as in every census division, state and the top 100 metro areas.”

“Price gains, though, are continuing to slow their upward pace in a few cities with large housing markets,” Doerner adds.

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