The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, which covers all nine U.S. census divisions, posted a 10.6% annual gain in September, down from 12.9% year-over-year growth in the previous month.
“As expected, the Case-Shiller report today showed a continuation of the deceleration in home prices,” says Zonda chief economist Ali Wolf. “Buyers have regained some negotiating power following the rapidly rising mortgage rates and are showing reluctance to where home prices currently stand. As a result, the hand is forced for some sellers to lower their prices to ensure a quick sale. We expect to see a further deceleration of home prices into the first half of next year.”
The 10-City Composite Index recorded an annual increase of 9.7% in September, down from 12.1%, while the 20-City Composite Index posted a 10.4% year-over-year gain, down from 13.1% in the previous month.
“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.,” says Craig Lazzara, managing director at S&P Dow Jones Indices. “For all three composites, year-over-year gains, while still well above their historical medians, peaked roughly six months ago and have decelerated since then.”
According to the report, Miami; Tampa, Florida; and Charlotte, North Carolina, reported the highest year-over-year price gains among the 20 cities in September, at 24.6%, 23.8%, and 17.8% growth, respectively. All 20 cities reported lower price increases in the year ending September 2022 compared with the year ending August 2022.
“Despite considerable regional differences, all 20 cities in our September report reflect these trends of short-term decline and medium-term deceleration,” Lazzara says. “Prices declined in every city in September, with a median change of -1.2%.”
According to Lazzara, the Southeast and South were the strongest regions for annual price gains, recording 20.8% and 19.9% year-over-year growth, respectively. The two worst-performing cities analyzed were San Francisco (+2.3%) and Seattle (+6.2%).
Before seasonal adjustment, the U.S. National Index posted a 1% month-over-month decrease in September, while the 10-City and 20-City Composites posted decreases of 1.4% and 1.5%, respectively. After seasonal adjustment, the National Index posted a month-over-month decrease of 0.8%, while the 10-City and 20-City Composites both posted decreases of 1.2%.
“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be more expensive and housing becomes less affordable,” Lazzara says. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
