Home prices in major U.S. metropolitan areas rose for the ninth month in a row and hit a record high due to a persistent lack of homes for sale.
The S&P CoreLogic Case-Shiller 20-city house-price index rose a seasonally adjusted 0.6% in October compared with the previous month.
Home prices in the 20 major U.S. metropolitan markets were up an average of 4.9% in the 12 months ending in October.
A broader measure of home prices, the national index, rose 0.6% in October and was also up 4.8% over the past year.
The 20-city and the national indexes are both at all-time highs.
Key details: Detroit posted the biggest year-over-year home-price gains in October. Prices in that city were up 8.1%.
San Diego and New York followed. Portland, Ore., was the only city that saw prices fall in October.
| Cities in 20-city index | Change from last year |
| Atlanta | 5.3% |
| Boston | 6.6% |
| Charlotte, N.C. | 6% |
| Chicago | 6.9% |
| Cleveland | 6.4% |
| Dallas | 1.2% |
| Denver | 1.6% |
| Detroit | 8.1% |
| Las Vegas | 0.1% |
| Los Angeles | 6.1% |
| Miami | 6.7% |
| Minneapolis | 2.8% |
| New York | 7% |
| Phoenix | 0.9% |
| Portland, Ore. | -0.6% |
| San Diego | 7.2% |
| San Francisco | 1.6% |
| Seattle | 1.5% |
| Tampa, Fla. | 2.3% |
| Washington, D.C. | 3.4% |
| Composite-20 | 4.9% |
A separate report from the Federal Housing Finance Agency also showed that home prices rose 0.3% in October from the previous month and were up 6.3% in the past year.
Big picture: Home prices continued to march upward — even though mortgage rates hit 8% in October — due to a serious shortage of homes for sale.
Though rising rates have spooked many potential buyers, people are still purchasing homes, pushing demand and home prices up.
Yet few homeowners are interested in selling their homes and giving up mortgage rates of 3% or 4%, which is creating a persistent shortage of resale inventory. Resale homes historically have accounted for nearly 90% of the market.
Until demand fizzles or supply improves significantly, the state of the market is unlikely to change.
What S&P said: “U.S. home prices accelerated at their fastest annual rate of the year in October,” says S&P DJI’s Brian D. Luke said. “We are experiencing broad-based home-price appreciation across the country, with steady gains seen in 19 of 20 cities.”
“Home prices leaned into the highest mortgage rates recorded in this market cycle and continued to push higher,” he added. “With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation.”
Looking ahead: “With mortgage rates dropping, demand for homes in early 2024 is likely to be strong and will again put pressure on prices, similar to trends observed in early 2023,” Selma Hepp, chief economist at CoreLogic, said in a statement.
“Annual home price appreciation should accelerate this winter before slowing again next year. Still, most markets will continue to reach new home price highs over the course of 2024,” she added.
Market reaction: Stocks
DJIA
SPX
were mixed in early trading on Tuesday. The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
was over 3.9%.
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