Is house price growth finally cooling down? That is a question asked by the S&P CoreLogic Case-Shiller Index for August, which showed a year-over-year slowdown and a slight dip compared to July.
On a non-seasonally adjusted basis, the national home price index posted a year-over-year gain of 4.2%, down from July’s 4.8% gain. The monthly index fell by 0.1%. Economists pointed to lower mortgage rates as a reason for the slower growth.
According to Clear MLS, it’s the slowest annual gain in 2024 yet and the first monthly decline since December 2022.
“This month’s publication reflects the period in which interest rates fell from approximately 7% to 6.35%,” Realtor.com Analyst Hannah Jones said this in a statement. “Although significant, this fall in interest rates has not yet resulted in a significant increase in demand and home sales activity, which has meant that house price growth has slowed further.”
The composite indices for 10 and 20 cities also showed a slight price decline month on month. The 10-city index fell 0.4% from July and rose 6% year-on-year, marking a slowdown from July’s 6.8% year-on-year increase.
The 20-city composite showed similar numbers, with a decline of 0.3% month-on-month and a gain of 5.2% compared to August 2023. That’s down from July’s 5.9% year-on-year growth .
Of the twenty cities analyzed, New York posted the highest annual home price growth at 8.1%, followed by Las Vegas (+7.3%), Chicago (+7.2%), Cleveland (+6.9%) and Detroit (+6%). New York and Las Vegas also posted the highest monthly gains in July.
Denver posted the slowest home price growth at 0.7% compared to a year ago, followed by Portland, Oregon (+0.8%); Dallas (+1.6%); Minneapolis (+2%); and Phoenix (+2.1%).
Despite the from the Federal Reserve With a half-point interest rate cut in September, rates for 30-year loans rose again to 6.7%, according to HousingWire‘s Mortgage Interest Center. This is significantly higher than August’s numbers and likely predicts that the Case-Shiller index will accelerate again when results arrive for the next few months.
“Monthly appreciation stabilized as the decline in mortgage rates attracted buyer interest at a time of limited affordability,” Zillow Chief economist Skylar Olsen said in a statement.
“That mortgage rate cut continued into September, but has since disappeared, and perhaps so has that renewed vigor in the monthly appreciation,” she added. “As we approach the slower fall months, buyers will likely continue to reject competitive prices, but sellers should continue to expect record high home values, especially in the northern and southwestern parts of the U.S.”
