Home Prices Rose to Record in September
S&P CoreLogic Case-Shiller National Home Price Index rose 3.9% from a year earlier
Updated Nov. 28, 2023 9:19 am ET
Home prices hit a new record in September due to a shortage of homes for sale, even as high interest rates made home purchases less affordable.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, rose 3.9% from a year earlier in September, compared with a 2.5% annual increase the prior month. The September level was the highest since the index began in 1987.
On a month-over-month basis, the index rose a seasonally adjusted 0.7% in September.
Home sales have slumped from a year ago because higher mortgage rates have pushed buyers out of the market. But the decline in demand isn’t causing prices to fall, because the inventory of homes on the market is unusually low. Higher rates have prompted potential home sellers to stay put because they don’t want to give up the low rates that they have on their existing mortgages.
The median existing-home sale price rose 3.4% in October from a year earlier to $391,800, according to the National Association of Realtors.
The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay and reflects a three-month moving average. Homes usually go under contract a month or two before they close, so the September data is based on purchase decisions made earlier this year.
Mortgage rates have declined in recent weeks after hitting two-decade highs in October.
“Speeding up of annual home price growth reflects much of the pent-up demand that exists in the housing market amid very low inventories,” said Selma Hepp, chief economist at CoreLogic. “Nevertheless, home prices are feeling the weight of high mortgage rates, which will slow the rate of price growth in the coming months.”
The Case-Shiller 10-city index rose 4.8% over the year ended in September, following a 3.0% increase in August. The 20-city index rose 3.9%, compared with a 2.1% increase in August.
Economists surveyed by The Wall Street Journal expected the 20-city index to increase 3.9%.
Detroit had the fastest annual home-price growth in the country, at 6.7%, followed by San Diego, at 6.5%. The weakest market was Las Vegas, where prices fell 1.9% on an annual basis.
A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found a 6.1% increase in home prices in September from a year earlier. The FHFA index rose 0.6% in September from the prior month on a seasonally adjusted basis.