WASHINGTON — The rate of U.S. home appreciation continued its second-half cooling with smaller, double-digit gains.
The S&P CoreLogic Case-Shiller 20-city home price index, out Tuesday, climbed 18.4% in October from a year earlier. The annualized gain has thinned for three consecutive months, down from 20% in July — or 92% of the appreciation rate of three months earlier.
Only six of the 20 cities showed growing gains:
No. 1 Atlanta: Up 21.3% in the year ended in October vs. 18.6% gain in July, or 115% of increases of three months earlier.
No. 2 Tampa: 28.1% for October vs. 24.4% or 114.9%
No. 3 Miami: 25.7% for October vs. 22.4% or 114.7%
No. 4 Las Vegas: 25.5% for October vs. 22.4% or 113.4%
No. 5 Charlotte: 22.5% for October vs. 20.9% or 107.5%
No. 6 Dallas: 24.6% for October vs. 23.7% or 103.9%
These 14 cities saw appreciation cool …
No. 7 Phoenix: 32.3% for October vs. 32.4% three months earlier, or 99.8% of July’s appreciation rate.
No. 8 Los Angeles: 18.5% for October vs. 19% or 97.3%.
No. 9 Denver: 20.3% for October vs. 21.3% or 95.4%.
No. 10 Portland: 17.7% for October vs. 19.5% or 91%.
No. 11 Detroit: 14.7% for October vs. 16.1% or 91%.
No. 12 Seattle: 22.8% for October vs. 25.5% or 89.2%.
No. 13 Chicago: 11.5% for October vs. 13% or 88.5%.
No. 14 San Diego: 24.2% for October vs. 27.8% or 87.2%.
No. 15 San Francisco: 18.5% for October vs. 21.9% or 84.2%.
No. 16 Cleveland: 13.3% for October vs. 16.5% or 81%.
No. 17 Boston: 15.1% for October vs. 18.7% or 81%.
No. 18 Minneapolis: 11.5% for October vs. 14.3% or 80.4%.
No. 19 Washington: 12% for October vs. 15% or 79.7%.
No. 20 New York: 14.6% for October vs. 18.5% or 78.7%.
The housing market has been strong thanks to rock-bottom mortgage rates, a limited supply of homes on the market, and pent-up demand from consumers locked in last year by the pandemic. Many Americans, tired of being cooped up at home during the pandemic, are looking to trade up from apartments to homes or to bigger houses.
“Home price growth will slow further in the year ahead, but continue to go up,″ said Danielle Hale, chief economist at Realtor.com. “As housing costs eat up a larger share of home purchaser’s paychecks, buyers will get creative. Many will take advantage of ongoing workplace flexibility to move to the suburbs where despite home price gains, many can still find a lower price per square foot than nearby cities.″
It remains unclear if that shift is permanent or an aberration, said Craig Lazzara, managing director at S&P Dow Jones Indices.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic,” Lazzara said. “More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred over the next several years, or reflects a more permanent secular change.”
Last week, mortgage rates fell — to 3.05% for the benchmark 30-year, fixed-rate and 2.66% for the 15-year fixed-rate home loan. The persistently low rates signal that credit markets appear more concerned about the omicron variant depressing economic growth than about the highest inflation rates in nearly 40 years.
The National Association of Realtors reported last week that sales of previously occupied homes rose for the third straight month in November to a seasonally adjusted annual rate of 6.46 million.
The Associated Press and the Southern California News Group’s Jonathan Lansner contributed to this report.
