Home-price growth remained weak in October, with experts pointing to continued inflation and elevated mortgage rates as the cause, according to the latest data.
The October S&P Cotality Case-Shiller Home Price Index found that home-price growth posted a 1.4% annual gain, slightly up from a 1.3% rise in the previous month.
Nicholas Godec, head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices, said that October’s data is “among the weakest performances since mid-2023.”
“For context, this is the weakest annual home-price growth since the March through July 2023 period, when the market was absorbing the initial shock of the Fed’s rapid rate hikes,” he continued. “But today’s headwinds appear more entrenched. Elevated mortgage rates, paired with inflation that continues to outpace home price gains, have intensified affordability pressures, potentially setting a new equilibrium of minimal price appreciation or, in some markets, outright declines.”
Godec also said the October data shows “the housing market settling into a much slower gear,” something Realtor.com® Senior Economist Joel Berner agreed with.
“Momentum in the housing market is struggling to pick up as affordability constraints and a softening labor market weigh on demand,” Berner said in a statement.
The report also stated that the 10-City Composite was up 1.9%, down from a 2% increase in the previous month, and the 20-City Composite was up 1.3%, down from a 1.4% increase in the previous month.
Chicago reported the highest annual price growth among the 20 cities, with a 5.8% increase in October, followed by New York and Cleveland with annual increases of 5% and 4.1%, respectively.
On the other hand, Tampa posted a 4.2% drop, which Godec characterized as the “steepest drop among the 20 cities, marking Tampa’s 12th consecutive month of annual declines.” Other similar Sun Belt cities that used to be “high-flyers” are also negative, including Phoenix (down 1.5%), Dallas (1.5%) and Miami (1.1%).
“It’s a stark reversal from the pandemic boom, as the markets that were once ‘pandemic darlings’ are now seeing the sharpest corrections while more traditional metros continue to post modest gains,” explained Godec.
Month-over-month, the U.S. National Index reported a monthly increase of 0.4% and both the 10-City Composite and 20-City Composite Indices posted month-over-month gains of 0.3%.
Looking ahead, Berner said that mortgage rates are expected to remain near their current level as we shift into 2026, “offering incremental affordability relief but not enough to unlock a sharp rebound in activity.”
“As a result, home price growth is likely to continue decelerating nationally, with outcomes increasingly determined by local inventory conditions,” he continued. “Markets with persistent supply constraints should continue to post firmer price gains, while areas with rebuilding inventory and new-construction competition face ongoing price pressure as the market works toward a more balanced footing.”
