In September, national home prices grew at a slower but still unsustainable pace. Locally, 14 out of 20 metro areas reported that they realized a deceleration in home price growth in September. This month’s data indicates that housing market is cooling slightly as housing affordability concerns persist.
The S&P CoreLogic Case-Shiller U.S. National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 15.1% in September, following an 18.6% increase in August. The annual growth rate of home prices has decelerated for four consecutive months since June 2021. National home prices are now 46.5% higher than their last peak during the housing boom in 2006. On a year-over-year basis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index posted an 19.5% annual gain in September, slower than a 19.8% increase in August. Home price appreciation (YOY) slowed for the first time since May 2020.
Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 11.2% in September, following a 12.4% increase in August. On a year-over-year basis, the FHFA Home Price NSA Index rose by 17.8% in September, slower than an increase of 18.5% in August. The FHFA thus confirmed the slowdown in home price growth for this month.
Home prices have grown much faster than household’s income. According to the latest data from the Census Bureau, median household income decreased 2.9% in 2020 to $67,521, from the 2019 median of $69,560. It is the first decline in median household income since 2011. Home price appreciation is expected to slow in the coming years due to rising mortgage rates and declining affordability conditions.
In addition to tracking national home price changes, S&P CoreLogic reported home price indexes across 20 metro areas in September. All 20 metro areas reported positive home price appreciation and their annual growth rates ranged from 0.8% to 34.6%. Among all 20 metro areas, eight metro areas exceeded the national average of 15.1%. Tampa led the way with a 34.6% increase, followed by Miami with a 29.7% increase and Atlanta with a 27.4% increase.
The scatter plot below lists the 20 major U.S. metropolitan areas’ annual growth rates in August and in September. The X-axis presents the annual growth rates in August; the Y-axis presents the annual growth rates in September. Fourteen out of the 20 metro areas had a deceleration in home price growth, including Phoenix, San Francisco, Denver, Washington D.C., Miami, Tampa, Atlanta, Detroit, Minneapolis, Las Vegas, New York, Cleveland, Portland, and Dallas.