Stubbornly elevated mortgage rates were no match for the housing market’s inventory squeeze in September, when home prices reached — another — record high.
Prices rose a modest 0.3 percent from August to September before seasonal adjustment, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. The national index’s monthly gain is even stronger with seasonal adjustment, reaching 0.7 percent.
It was another month of home prices rising to records heights after the index reached an all-time high in July, pivoting from a seven-month stretch of declines.
The national index also posted a 3.9 percent gain from last September, a larger jump than the 2.5 percent yearly gain recorded in August.
The 10-City Composite and 20-City Composite indices also posted annual gains of 4.8 percent and 3.9 percent, respectively.
Prices surged the most in the Northeast and Midwest, which posted annual gains of 5.3 percent and 5 percent, respectively. In the West, prices dropped 1.3 percent.
Detroit zoomed past Chicago and posted the highest year-over-year price gain, with a 6.7 percent annual increase in the Motor City. It was followed by San Diego (6.5 percent) and New York (6.3 percent) for the top-rising markets; Chicago, Miami and New York are among the markets at an all-time pricing high.
On the other end, Las Vegas saw the biggest drop of 1.9 percent, followed by Phoenix (1.2 percent) and Portland (0.7 percent).
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Broken record: Mortgage rates hit 23-year high
The impact of mortgage rates hasn’t been fully seen in the S&P indices, due to the two-month lag before results are reported. Mortgage rates hit a two-decade high in October, but have eased slightly since then, a relief for homebuyers. It could also help reveal a more favorable position for prospective homeowners.
“Price growth is expected to moderate further into October as the mortgage rate ascent to a 23-year high brought a larger housing market slowdown than is typical for this time of year,” Zillow’s Divounguy stated.