New data reveals significant growth in home prices
New data released on Tuesday showed that home prices in the United States have experienced their most rapid annual growth rate of the year in the month of October. The S&P CoreLogic Case-Shiller home price index, which encompasses data from all nine U.S. Census divisions, recorded a staggering 4.8% increase in home prices in October 2023. Both the 10-city and 20-city composites also reported substantial year-over-year increases, with 5.7% and 4.9% growth rates, respectively.
According to Brian D. Luke, the head of commodities, real and digital assets at S&P Dow Jones Indices, “U.S. home prices accelerated at their fastest annual rate of the year in October.” Luke further stated, “Our National Composite rose by 0.2% in October, marking nine consecutive monthly gains and the strongest national growth rate since 2022.”
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The latest report highlights three cities that have emerged as leaders in terms of the pace of growth in home prices. “Detroit maintained its position as the fastest-growing market for the second consecutive month, registering an impressive 8.1% annual gain,” Luke revealed. San Diego followed closely behind with a 7.2% annual gain, while New York recorded a 7.1% increase.
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Luke highlighted the fact that the United States is currently experiencing widespread home price appreciation. Steady gains have been observed in 19 out of 20 cities, demonstrating the trend of growth compared to historical returns, with minimal disparity among cities and regions. Luke added, “Each of our 10-city, 20-city, and National Index remain at all-time highs, with eight of the 20 cities reaching their highest recorded levels (Miami, Atlanta, Chicago, Boston, Detroit, Charlotte, New York, and Cleveland).”
Furthermore, Luke mentioned that although Portland’s gains remain slightly lower compared to the previous year, Phoenix and Las Vegas have transitioned to year-over-year gains.
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The report also examined the variations between different regions. The Midwest and Northeast emerged as the fastest-growing markets, while the Southwest and West regions have lagged behind for over a year.
Luke characterized the report as “solid, if unspectacular,” noting that it reflects overall growth across nearly all markets. He highlighted that this growth has occurred despite a period of high mortgage rates, which were implemented by the Federal Reserve in an attempt to curb inflation.
Looking ahead, Luke expressed optimism, suggesting that as mortgage rates ease and the Federal Reserve adopts a slightly more accommodative stance, homeowners may be poised to witness further appreciation in their property values.