Home prices surge more than 19% in October, but rate of increase slows
Increases still remain near all-time highs
Home prices increased by nearly 20% annually in October for the third straight month, but the rate was down from the past several months of increases, according to new home price data released Tuesday from S&P Dow Jones Indices.
The 19.1% rise annually in October was down from the upwardly revised 19.7% in September but still the fourth-highest annual growth rate ever seen, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. The past few months have seen a slight deceleration in price growth each month.
"The National Composite Index rose 19.1% from year-ago levels, and the 10- and 20-City Composites gained 17.1% and 18.4%, respectively," said S&P DJI Managing Director Craig Lazzara. "In all three cases, October’s gains were below September’s, and September’s gains were below August’s."
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Home price growth remains strong at city level
Home prices across all the top cities increased, with the hottest markets including Phoenix, Tampa and Miami reporting the highest price gains among the top 20 cities annual rates of 32.3%, 28.1% and 25.7%, respectively.
"All 20 cities saw price increases in the year ended October 2021. October’s increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 17 of them, Lazzara said. "As was the case last month, however, in 14 of 20 cities, prices decelerated – i.e., increased by less in October than they had done in September."
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Home price growth to remain strong in 2022
Home price growth is expected to remain robust in 2022, according to CoreLogic Deputy Chief Economist Selma Hepp, albeit at a slower pace than during the surge in home sales demand amid the COVID-19 pandemic.
"The slowing of home prices is most notable in colder and more expensive areas, as well as middle-tier priced homes where homebuyers may have less wiggle room in their budgets," she said. "Low-tier priced homes are still in higher demand as entry-level buyers and investors continue to compete for the very limited supply.
"This suggests that 2022 will be another year of strong home price growth, averaging 7% for the year – which is slower than 2021 but still above the 5% average increase seen between 2010 and 2020."
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