In October, US home prices surged to unprecedented levels, yet the pace of annual price growth has started to slow, as indicated by the latest data from S&P Global's division, S&P Dow Jones Indices. The S&P CoreLogic Case-Shiller Index experienced a sequential increase of 0.35% in October following necessary seasonal adjustments, marking an improvement from the previous month's gain of 0.28%.
Analyzing the performance across major urban centers, the 10- and 20-city composites saw gains of 0.31% and 0.32%, respectively—an increase compared to the 0.17% and 0.22% observed in September. On an annual basis, national home prices climbed by 3.6% in October, a slight drop from a 3.9% rise recorded the month before.
The index measuring 10 cities reported a 4.8% increase, a reduction from the 5.2% growth seen in September, while the 20-city composite also saw a decline to 4.2% from 4.6% the previous month. Brian Luke, who oversees commodities, real, and digital assets at S&P Dow Jones Indices, commented, 'Our national index reached its 17th consecutive all-time high.
The positive inflation-adjusted annual returns are a welcome sign, although they continue to lag behind the annualized gains this decade.' Among the surveyed 20 cities, New York led with the highest annual price surge of 7.3%, followed closely by Chicago and Las Vegas. Tampa, however, recorded a modest year-over-year increase of only 0.4% in October. 'Our latest data reflects a period that anticipates the US presidential election.
The continuous improvement in our national index signifies positive movement,' Luke added. 'The alleviation of political uncertainty may be fueling an equity market rally, and it will be crucial to see if this sentiment resonates similarly among homeowners.' In a separate report, the Federal Housing Finance Agency (FHFA) noted a 0.4% rise in home prices on a seasonally adjusted basis in October, contrasted with the prior month’s unchanged gain of 0.7%.
This finding aligns with consensus expectations as reported in a survey by Bloomberg. Year-over-year, home prices increased by 4.5% in October. Anju Vajja, Deputy Director of FHFA's Division of Research and Statistics, explained, 'Annual house price gains have been on a downward trend since February, averaging around 4.5% over the last three months.
Despite high home prices and elevated mortgage rates, which continue to challenge affordability, housing prices have maintained a steady increase, likely supported by the historically low inventory of homes available for sale.'.