Prices increased in 15 of 20 major metropolitan markets on a month-over-month basis in September, according to data from the S&P CoreLogic Case-Shiller Indices.
The National Home Price NSA Index, covering all nine census divisions, posted a 3.9% annual change in September, up from the 2.5% change in the previous month. According to Craig Lazzara, the managing director at S&P Dow Jones Indices, the national composite has increased month over month eight straight times and is 6.6% above its January level.
“The big ‘wow’ in the latest home price report is that the national index was at an all-time high amid higher interest rates,” says Zonda chief economist Ali Wolf. “This captures the fact that demographic and life happens demand still outpaced supply earlier this year. It is important to remember that this is September data reflecting activity from June and July of this year, and future releases this year will likely not be as strong, though.”
The 10-City Composite index increased 4.8% on a year-over-year basis, and the 20-City Composite index posted annual gains of 3.9%, up from 2.1% the previous month. Detroit reported the highest year-over-year gain among the 20 cities analyzed, with a 6.7% increase in September.
“Notably, the National Composite, the 10-City Composite, and 10 individual cities (Atlanta; Boston; Charlotte, North Carolina; Chicago; Cleveland; Detroit; Miami; New York; Tampa, Florida; and Washington, D.C.) stand at their all-time highs,” Lazzara says.
San Diego reported a 6.5% year-over-year increase in prices. Three of the 20 cities reported lower prices in September compared with a year ago.
“Year over year, September’s worst performers were Las Vegas (-1.9%), Phoenix (-1.2%), and Portland, Oregon (-0.7%),” says Lazzara. “The Northeast (+5.3%) and Midwest (+5.0%) continue as the nation’s strongest regions, while the West (-1.3%) remains the weakest.”
Before seasonal adjustment, the U.S. National Index posted a 0.3% month-over-month increase in September. After seasonal adjustment, the National Index, the 10-City, and the 20-City Composites each posted month-over-month increases of 0.7%.
Metros with the strongest gains since the beginning of the year include San Diego (+10.7%), Detroit (+10%), and Chicago (+8.9), according to CoreLogic chief economist Selma Hepp. Hepp says nationally home prices are 16% higher, adjusted for inflation, compared with the 2006 peak.
“On a year-to-date basis, the National Composite has risen 6.1%, which is well above the median full calendar year increase in more than 35 years of data,” Lazzara says. “Although this year’s increase in mortgage rates has surely suppressed the quantity of homes sold, the relative shortage of inventory for sale has been a solid support for prices. Unless higher rates or exogenous events lead to general economic weakness, the breadth and strength of this month’s report are consistent with an optimistic view of future results.”
