Home Prices Continued Three-Month Decrease In September
Topline
Home prices continued to decline for the third-straight month in September, according to data released Tuesday, after the housing market reported its largest deceleration ever in August.
Homes across every U.S. city experienced price decreases in September.
Key Facts
Home prices declined by 1.2% between August and September, according to the S&P CoreLogic Case-Shiller Home Price Index.
The Case-Shiller 20-City Index, accounting for prices in the nation’s largest cities like New York, Los Angeles and San Francisco, fell 1.5% month-over-month as prices dropped in all major markets.
Cities with the steepest monthly declines are located in the West, as prices in San Francisco fell 2.2%, followed by Las Vegas and Phoenix at 2.1% and Los Angeles by 1.7%.
Though all cities in the U.S. have seen annual increases despite the recent decline, Miami, Tampa and Charlotte have posted the largest annual price increases through September, rising by 24.6%, 23.8% and 17.8%, respectively.
“Despite considerable regional differences, all 20 cities in our September report reflect these trends of short-term decline and medium-term deceleration,” S&P managing director Craig Lazzara said in a statement.
Bill Adams, chief economist for Comerica Bank, told Forbes in an email that while the housing market continues to take hits, “a mid-2000s style blowup seems quite unlikely.”
Crucial Quote
“Mortgage underwriting standards became much stricter after the Great Recession, and most homeowners have lots of equity in their homes and stronger balance sheets than when the last housing boom went bust,” Adams said. “Even so, the continued pullback in the housing and commercial real estate markets is going to be a major headwind to the economy, likely holding real GDP growth to near zero in 2023 and leading to a moderate increase in the unemployment rate from its current very low level.”
Big Number
632,000. That’s how many single-family homes were sold in October, according to the U.S. Census Bureau and the Department of Housing and Urban Development, with a median sales price of $493,000.
Key Background
A housing market correction to ease inflation has some experts worried about a possible recession, though Adams notes “the economy is positioned to be more resilient” heading into 2023. As mortgage rates and the median home prices continue to rise—an increase of 10.6% between third-quarter estimates in 2021 and 2022—Comerica expects home prices to continue to fall by mid-2023, with larger declines in more tech-centric areas like San Francisco. The bank previously forecasted the housing market’s collapse subtracting half a percentage point from overall GDP growth in 2022, accounting for $114 billion in economic activity.
Further Reading
Housing Market Collapse: ‘Forceful’ Slowdown In Home Prices As Warning Signs Become ‘Eerily Similar’ To 2000s Crisis (Forbes)
The Housing Market Just Hit The Brakes. What Happens Now? (Forbes)
