Home price increases slow more than expected in September: Case-Shiller

S&P Case-Shiller Index spotlights an early fall housing market with fewer families actively looking for homes, after the start of a new, and mostly in-person, school year. Home prices advanced at 19.5% in September, pointing to a moderating pace, as an increase in new listings offered buyers more options. The other factor contributing to the slowing price growth was the jump in mortgage rates, with Freddie Mac’s 30-year fixed loan moving from 2.87% at the start of September to 3.01% by the end of the month, curbing buyers’ ability to bid up prices. The 10- and 20-city indices advanced by 17.8% and 19.1%, respectively, and both registered slower growth than the prior month. There were only six of 20 cities in the index which recorded higher yearly advances during the month. Phoenix, Tampa and Miami saw the largest price gains, as sunny southern states remained attractive to many buyers.

The index included prices from July, August, and September, as the delta variant placed many companies’ plans to re-open offices on hold. The silver lining was that employment continued improving, and most economic data underscored a more resilient environment.

What does it mean for homebuyers, sellers, and the housing market?

As we approach the end of a tumultuous 2021, real estate markets continue to struggle with inventory, homes are selling quickly and prices continue to rise. However, the market has cooled since the beginning of the year, when dozens of competing bids, contingency waivers and price escalation clauses made home shopping a struggle, especially for first-time buyers. A growing number of homeowners are preparing to list in the next six months, hinting at an uncharacteristically active winter season. In addition, inflation and rising mortgage rates are squeezing many household budgets. As a result, prices are beginning to cool in some markets, with Realtor.com’s data showing that 17 out of the top 50 largest cities experienced listing price declines in October, compared with last year. For buyers, the landscape looks more promising as we head into 2022.