Annual home price increases fell back into single digits in October. Both the S&P CoreLogic Case-Shiller and Federal Housing Finance Agency’s (FHFA’s) Home Price Index reported that rising interest rates have essentially ended two years of explosive appreciation, and in many cases, home prices have begun to decline. The Case-Shiller National Index, which covers all nine U.S. census divisions, rose 9.2 percent year-over-year in October, compared to a 10.7 percent increase the previous month. The 10-City Composite annual increase came in at 8.0 percent, 1.6 percentage points lower than in October, while the 20-City Composite’s gain was 8.6 percent, down from 10.4 percent. All 20 cities reported lower price increases in the year ending in October versus the year that ended in September. Some cities still show exceptional annual growth. Miami led the way with a 21 percent year-over-year price increase, followed by Tampa with a 20.5 percent increase, and Charlotte in third place at 15 percent. The two weakest performers were San Francisco (up only 0.6 percent year-over-year) and Seattle (+4.5 percent). Both cities peaked in May 2022, and both have declined by more than 10 percent since then. CoreLogic Deputy Chief Economist Selma Hepp said of the results, “Home price growth continued its rapid slowdown, dropping sales volume as much as 40 percent year over year this fall. These trends will likely continue into 2023, with prices expected to decline annually by the second quarter. Even with general housing market volatility, 2022’s home price growth will be the second highest after 2021.”
