Home values continued to fall in August as affordability took hold of both buyers and sellers. The impact was not as intense as it could have been given the slight reprieve in mortgage rates in August, which briefly dropped below 5% and helped to bolster sales counts. But that was short lived leading into September and October with much higher rates and more affordability concerns.
Home values continued to fall in August as affordability took hold of both buyers and sellers. The impact was not as intense as it could have been given the slight reprieve in mortgage rates in August, which briefly dropped below 5% and helped to bolster sales counts. But that was short lived leading into September and October with much higher rates and more affordability concerns. As a result, now we are seeing demand falling back in the face of strapped budgets and potential sellers staying put causing inventory to continue to struggle. Price growth will likely continue to moderate and short term prices will likely continue to fall. But this is all part of the housing market rebalancing which will lead to a healthier more stable market down the road. This rebalancing is already leading the way towards a buyers market as buyers are now seeing more negotiating power and an easier, less stressful home shopping experience.
The national Case-Shiller Home Price Index rose 13% year-over-year in August, down from the rate set in July. Annual appreciation slowed in both the 10- and 20-city (non-seasonally adjusted) indices. The annual gain in the 10-city index fell from 14.9% in July to 12.1% in August and for the 20-city composite index from 16.1% to 13.1%. From July to August the national index (seasonally adjusted) fell to -0.9%, while the 10- and 20-city indices were down -1.3% and -1.3%, respectively.
| ZILLOW FORECAST, RELEASED 9/31/22 | ACTUAL CASE-SHILLER INDICES, RELEASED 10/25/22 |
|
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
0.4% | -1.3% |
| 10-City Composite, Year-Over-Year (NSA) |
13.7% | 12.1% |
| 20-City Composite, Month-Over-Month (SA) |
0.5% | -1.3% |
| 20-City Composite, Year-Over-Year (NSA) |
14.8% | 13.1% |
| U.S. National Month-Over-Month (SA) |
-0.1% | -0.9% |
| U.S. National Year-Over-Year (NSA) |
13.8% | 13.0% |
While turning points and slowdowns can be uncomfortable in the housing market, they are important to getting back to stability. And the minor drops in prices now are so slight in comparison to the massive swath of appreciation seen in the last two and a half years giving most homeowners peace of mind.
Annual home price growth as reported by Case-Shiller are expected to accelerate in all three indices. Monthly appreciation in September is expected to decelerate. S&P Dow Jones Indices is expected to release data for the September S&P CoreLogic Case-Shiller Indices on Tuesday, November 29.
| INDEX | ACTUAL AUGUST CASE-SHILLER CHANGE |
ZILLOW’S FORECAST FOR THE CASE-SHILLER SEPTEMBER INDICES |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
-1.3% | 0.3% |
| 10-City Composite, Year-Over-Year (NSA) |
12.1% | 11.3% |
| 20-City Composite, Month-Over-Month (SA) |
-1.3% | 0.4% |
| 20-City Composite, Year-Over-Year (NSA) |
13.1% | 12.2% |
| U.S. National Month-Over-Month (SA) |
-0.9% | -0.5% |
| U.S. National Year-Over-Year (NSA) |
13.0% | 11.3% |
Note: Case-Shiller and Case-Shiller Index are registered trademarks of CoreLogic Solutions, LLC. The statements herein are not endorsed by or provided in association or connection with CoreLogic, LLC.
