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Home Price Gains Slow For the First Time Since May 2020
November 30, 2021
The red-hot housing market may finally be starting to cool, but prices are still expected to remain high.
Home prices nationally increased 19.5% year-over-year in September, according to the S&P CoreLogic Case-Shiller National Home Price Index, down slightly from a 19.8% increase in August.
While this is a slight decline, it marks an important milestone. This is the first month that has seen a decrease in the annual gain since May 2020.
Despite the deceleration, industry analysts expect strong price growth so long as inventory remains constrained. Though things may have cooled since the beginning of the year, which saw frenzied buyers engage in bidding wars, prices are expected to continue climbing, albeit at a slower pace.
Another reason price gains may continue to slow is higher interest rates. The average rate for a 30-year fixed-rate mortgage was 2.78% at the beginning of August. By the end of September, it had climbed to 3.15%. With mortgages getting more expensive, buyers, particularly first-time buyers, may find themselves increasingly priced out of the market.
