U.S. Home Prices Show Steady Growth despite Market Challenges

Economists predict that U.S. home prices in 20 major metropolitan areas continued to rise in September, maintaining a positive trend observed in recent months. The S&P CoreLogic Case-Shiller home price index, which measures changes in these areas, is expected to have increased by a seasonally adjusted 0.45% during this period, according to FactSet data. Additionally, prices are projected to have grown by 4.1% compared to the previous year.

Despite a slowdown in existing-home sales, housing prices have remained resilient on a national level as well as within the 20-city index. In September, the National Association of Realtors reported the lowest sales volume in 13 years, and the downward trend continued into October.

Observing this market situation, Craig Lazzara, managing director at S&P Dow Jones Indices, commented that the increase in mortgage rates throughout the year has undoubtedly impacted housing demand. However, Lazzara also stated that the supply of homes has been even more affected by these higher rates after experiencing an extended period of historically low rates.

Lazzara emphasized that unless there is a significant economic downturn resulting from higher rates or unforeseen events, the recent report indicates an optimistic outlook for future results. Furthermore, more recent but less comprehensive data suggests that home prices have maintained higher levels throughout October and the beginning of November when compared to the same periods last year.

Housing Market Trends

In conclusion, the current housing market shows no signs of price relief, but there is a chance for some declines in the coming years. As mortgage rates continue to impact buyers, the increase in new listings could alleviate some of the competition among buyers. Nevertheless, the market's future trajectory will largely depend on mortgage rate trends.