S&P Dow Jones Indices and the Federal Housing Finance Agency (FHFA) recently released their home prices indexes for September, respectively.
The Case-Shiller (CS) national house price index accelerated to a 10.4% seasonally adjusted annual pace in September while the price index from the Federal Housing Finance Agency (FHFA) rose at a 9.5% pace. A surge in sales pushed existing house price appreciation to new highs.
House price appreciation has largely followed the ebb and flow of existing home sales over the course of 2015 with home buyers rushing in to stay ahead of anticipated interest rate increases and falling back when the rate increase doesn’t materialize. We expect this pattern can continue as long as uncertainty about interest rates persists, but ultimately the pace of house price appreciation should moderate, drifting down to a more sustainable pace in 2016 and 2017.