Home prices continue to rise, but the pace of that rise seems to be slowing. Since June, year-to-year increases have decelerated for four consecutive months.
CHICAGO – 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 CoreLogic Case-Shiller U.S. National Home Price Index, reported by Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 15.1% in September, following an 18.6% increase in August – the fourth consecutive month for a dampened growth rate that started in June 2021.
Even with the slowdown, however, home prices continue to rise at an unsustainable pace.
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 CoreLogic Case-Shiller U.S. National Home Price NSA Index posted an 19.5% annual gain in September, even though it’s 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 Index rose by 17.8% in September, slower than an increase of 18.5% in August.
According to the National Association of Home Builders, the FHFA numbers confirmed the slowdown in home price growth for that month.
The home price increases are unsustainable because they’re growing a lot faster than household income. According to the Census Bureau, median household income decreased 2.9% in 2020 to $67,521, from a 2019 median of $69,560, likely due at least in part to the pandemic. It’s the first decline in median household income since 2011.
Overall, 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, CoreLogic reported home price indexes across 20 metro areas in September, and all 20 saw positive price appreciation, with annual growth rates ranging 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.
© 2021 States News Service
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Author: kerrys