While single-family home prices maintained their upward momentum in October, the rate has continued to decelerate, according to the most recent S&P CoreLogic/Case-Shiller Indices.
The organization reported that home prices climbed 19.1% in October, down from 19.7% the prior month.
All 20 cities saw a similar slowdown in price increases, according to the report. The 10-City Composite increased by 17.1%—down from 17.9% in September— while the 20-City Composite recorded an 18.4% price gain compared with the 19.1% seen in the previous month.
Phoenix, Tampa and Miami maintained their top spots as the markets with the highest YoY price gains, recording 32.3%, 28.1% and 25.7%, respectively.
The complete data for the 20 markets measured by S&P:
Las Vegas, Nev.
Los Angeles, Calif.
New York, N.Y.
San Diego, Calif.
San Francisco, Calif.
What the Industry Is Saying:
“In October 2021, U.S. home prices moved substantially higher, but at a decelerating rate… That said, October’s 19.1% gain in the National Composite is the fourth-highest reading in the 34 years covered by our data. The top three were the three months immediately preceding October.
“We continue to see very strong growth at the city level. All 20 cities saw price increases in the year ended October 2021. October’s increase ranked in the top quintile of historical experience for 19 cities and in the top decile for 17 of them. As was the case last month, however, in 14 of 20 cities, prices decelerated—i.e., increased by less in October than they had done in September.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred over the next several years, or reflects a more permanent secular change.” — Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices
“With prices for all kinds of goods and services continuing to rise, housing is no exception… On the bright side for potential buyers, the pace of price growth slowed from September, marking the second month of deceleration nationally and the third for the 20- and 10-City indices.
“However, home price growth remains notably above historic norms… Coupled with gradually rising mortgage rates—which are expected despite last week’s dip—this pace of home price growth means the challenge of rising home costs for most buyers, but especially for first-time homebuyers who don’t have equity from a previous home to help get their foot in the door. In the face of competitive market dynamics, our recent survey shows that first-time homebuyers are adjusting, with nine in ten planning to employ some kind of tactic to navigate the competition, compared to just eight in ten in our previous survey last spring.
“Our 2022 Housing Market Forecast anticipates that home price growth will slow further in the year ahead but continue to go up. As housing costs eat up a larger share of home purchasers’ paychecks, buyers will get creative. Many will take advantage of ongoing workplace flexibility to move to the suburbs, where despite home price gains, many can still find a lower price per square foot than nearby cities. In addition to this outward push, we expect some buyers will take the leap to a whole new area, and in our Top Housing Markets of 2022, we expect continued growth in the Mountain West. In addition to lower density and activities that offer good quality of life, these markets have developing tech sectors and are still affordable compared to more traditional tech hubs.”
— Danielle Hale, Chief Economist, realtor.com®
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news to firstname.lastname@example.org.