‘Buyers Will Get Creative’: The Rate of Home-Price Growth Is Slowing, but Buyers Can’t Catch a Break
https://ift.tt/3pHmTeV
Getty Images
The numbers: Home-price growth continues to decelerate
For the third consecutive month, home-price appreciation occurred at a slower pace, according to a major price barometer released Tuesday, reinforcing the notion that the housing market is cooling after over a year of frenzied sales.
The S&P CoreLogic Case-Shiller 20-city price index posted a 18.4% year-over-year gain in October, down from 19.1% the previous month. On a monthly basis, the index increased 0.8% between September and October.
What happened
The separate national index from the Case-Shiller report showed a 19.1% annual gain, down from a 19.7% increase in September. While lower on the monthly basis, this still represented the fourth-largest annual increase in home prices over the 34-year history of the data.
Phoenix once again led the country in terms of home-price growth, with a 32.3% increase, reinforcing research that showed it to be the housing market where housing affordability suffered the most over the past year. It was followed by two Florida cities, Tampa and Miami. Only six of the 20 major cities that the report tracks notched larger price increases in October than in September, though prices did continue to increase in all 20 cities.
“U.S. home prices moved substantially higher, but at a decelerating rate,” Craig J. Lazzara, managing director at S&P DJI, said in the report. “October’s gains were below September’s, and September’s gains were below August’s.”
The big picture: Prices won’t start falling anytime soon
A separate home-price index from the Federal Housing Finance Agency recorded a 17.4% increase between October 2020 and October 2021 nationally. That report indicated that the Mountain region—Idaho, Montana, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico—saw the largest price gains.
“House price levels continue to rise, but the rapid pace is curtailing through October,” Will Doerner, supervisory economist in FHFA’s Division of Research and Statistics, said in the report. “The large market appreciations seen this spring peaked in July, and have been cooling this fall with annual trends slowing over the last four consecutive months.”
Still, slowing price-growth isn’t the same as falling prices. Home buyers can expect to pay more and more to buy a home throughout 2022. It’s a reflection of the tight inventory of properties for sale: With so few homes to go around, competition for what properties are on the market will ensure that prices will increase given the high demand for housing.
What they’re saying
“Unfortunately, the rate of home-price growth will be limiting for many young buyers who have yet to accumulate sufficient equity gains, and an expected increase in mortgage rates next year will present further challenges. Together, these two factors will keep a lid on continued home-price acceleration,” said CoreLogic deputy chief economist Selma Hepp.
“As housing costs eat up a larger share of home purchaser’s 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,” said Danielle Hale, chief economist at Realtor.com.
The post ‘Buyers Will Get Creative’: The Rate of Home-Price Growth Is Slowing, but Buyers Can’t Catch a Break appeared first on Real Estate News & Insights | realtor.com®.
Real-estate
