Home price growth slowed in September, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. According to the index, U.S. home prices recorded a 3.9% annual gain in September, a slight deceleration from the 4.3% gain in the previous month.
“Home price growth stalled in the third quarter, after a steady start to 2024,” says Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices. “The slight downtick could be attributed to technical factors as the seasonally adjusted figures boasted a 16th consecutive all-time high.”
As home price gains decelerated, data from the U.S. Census Bureau and Department of Housing and Urban Development (HUD) indicate the pace of new-home sales is slowing to end 2024.
The October New Residential Sales report found new single-family sales ran at a seasonally adjusted annual rate of 610,000 during the month. The estimate is 17.3% below the revised September rate of 738,000 and 8.4% below the October 2023 estimate.
“The drop in new home sales in the Census report captures three issues that impacted buyer activity in October: The sharp upward reversal in mortgage rates; the looming presidential election; and two hurricanes that contributed to an outsized decrease in sales in the South region," says Zonda chief economist Ali Wolf. "If you exclude the South from the data, however, new home sales in the other three regions were positive as a whole. This reflects the continued builder advantage in today’s market.”
According to the Census Bureau and HUD, the median sales price of new houses sold in October was $437,300 and the average sales price was $545,800. The seasonally adjusted estimate of new houses for sale at the end of October was 481,000, representing a supply of 9.5 months at the current sales pace.
The Case-Shiller 10-City Composite Index recorded an annual increase of 5.2% in September, down from 6% in the previous month. The 20-City Composite posted a year-over-year increase of 4.6% in September, dropping from its annual gain of 5.2% in the previous month.
“The continued cooling in the Case-Shiller Index in September reflects the ongoing affordability fatigue following years of home price appreciation," says Wolf. "In particular, the affordability challenge coupled with larger increases in inventory have softened price gains in select markets in the South and West. Markets in the Midwest and Northeast posted the strongest rates of appreciation, supported by strong demand and better affordability than in other parts of the country.”
Of the metros analyzed in the Case-Shiller report, New York reported the highest annual gain in home prices, with a 7.5% increase in September, followed by Cleveland (7.1%) and Chicago (6.9%). Denver posted the smallest year over year price increase with 0.2% in September.
“We continue to see above-trend price growth in the Northeast and Midwest, growing 5.7% and 5.4%, respectively, led by New York, Cleveland, and Chicago,” Luke says. “The Big Apple has taken the top spot for five consecutive months, pushing the region ahead of all others since August 2023. The South region reported its slowest growth in over a year, rising 2.8%, barely above current inflation levels.”
On a month-over-month basis, the pre-seasonally adjusted U.S. National Index, 10-City Composite, and 20-City Composite indices all reversed their upward trends in September. The national index declined 0.1%, the 10-City Composite index declined 0.4%, and the 20-City Composite index fell 0.3% month over month. After a seasonal adjustment, the U.S. National Index increased 0.3% month over month, while the 10-City and 20-City Composite indices posted monthly increases of 0.1% and 0.2%, respectively.
