The Case-Shiller home price index is slowing, but rising mortgage rates could accelerate it again
Is home price growth finally cooling off? That's a question raised for August, which showed a slowdown and slight decline year-on-year.
Based on non-seasonal adjustments, the national home price index showed a 4.2% year-over-year increase, down from a 4.8% increase in July. The monthly index decreased by 0.1%. Economists have cited low mortgage rates as a reason for slow growth.
according to Brilliant MLS, it was the slowest annual gain so far in 2024 and the first monthly decline since December 2022.
“This month's release covers a period when rates fell from around 7% to 6.35%” Realtor.com Analyst Hannah Jones made a statement. “Although significant, this reduction in rates has not yet resulted in a significant increase in demand and home sale activity, suggesting that home price growth continues to moderate.”
The 10-city and 20-city composite indices also showed a slight decline in prices during the month. The 10-city index fell 0.4% from July and rose 6% year-over-year, down from July's 6.8% year-over-year increase.
A composite of 20 cities posted similar figures, with a 0.3% month-on-month decline and a 5.2% increase compared to August 2023. That's down from a 5.9% annual increase in July.
Among the 20 cities analyzed, the highest year-over-year home price growth was 8.1%, followed by Las Vegas (+7.3%), Chicago (+7.2%), Cleveland (+6.9%) and Detroit (+6 %) was. ). New York and Las Vegas also had the highest monthly earnings in July.
Denver had the slowest year-over-year home price growth at 0.7%, followed by Portland, Oregon (+0.8%); Dallas (+1.6%); Minneapolis (+2%); and Phoenix (+2.1%).
though Federal Reserve System In September, rates on 30-year conforming loans rose again to 6.7%. That's well above rates in August and likely signals that the Case-Shiller index will accelerate again when results come in for the next few months.
“Monthly appreciation has been stabilized by the pause in mortgage rates, which has dampened interest from more buyers.” Zillow Chief Economist Skylar Olsen made a statement.
“This mortgage rate cut continued into September, but has since dissipated, possibly renewing strength in the monthly estimate with it,” he said. “As we head into the slower fall months, buyers will continue to shy away from steep prices, but sellers should continue to expect record high home equity, particularly in the Northwest and Southwest U.S.”
