U.S. home prices increased 0.6% on an adjusted basis in October compared with September and were up 4.8% compared with October 2022, as the rate of appreciation accelerated, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
The index’s 10-city and 20-city composites, measuring hone price e growth in the largest U.S. metros, also each increased by 0.6%, month-over-month.
Year-over-year, the 10-city composite increased 5.7% while the 20-city composite increased 4.9%.
Detroit reported the highest year-over-year gain among the 20 cities with an 8.1% increase in October, followed by San Diego at 7.2%.
Portland fell 0.6% and remained the only city reporting lower prices in October versus a year ago.
“U.S. home prices accelerated at their fastest annual rate of the year in October,” says Brian D. Luke, head of commodities, real and digital assets at S&P DJI, in a statement.
Luke adds that October marked “nine consecutive monthly gains and the strongest national growth rate since 2022.”
“We are experiencing broad based home price appreciation across the country, with steady gains seen in nineteen of 20 cities,” he says. “This month’s report reflects trend line growth compared to historical returns and little disparity among cities and regions.”
“While Portland remains slightly down compared to last year’s gains, Phoenix and Las Vegas have flipped to year over year gains,” he adds. “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.”
Luke says it is remarkable that these recent increases in home prices are coming despite higher mortgage rates.
“Home prices leaned into the highest mortgage rates recorded in this market cycle and continued to push higher,” he says. “With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation.”
CoreLogic Chief Economist Selma Hepp says the losses from 2022 have been recovered – and then some – in many areas.
“The 2023 housing market closed on a considerably lighter note than expected only one month ago,” Hepp says in a separate statement. “With mortgage rates dropping, demand for homes in early 2024 is likely to be strong and will again put pressure on prices, similar to trends observed in early 2023. As a result, home price gains in the CoreLogic S&P Case-Shiller Index have increased by 7 percent since the beginning of the year and are 1 percent higher than at the peak in 2022, recovering all losses recorded in the second half of 2022. In addition, given the stronger seasonal gains seen in early 2023, annual home price appreciation should accelerate this winter before slowing again next year. Still, most markets will continue to reach new home price highs over the course of 2024.”
Photo: Kostiantyn Li