Home prices in the 20 biggest U.S. metros rose for the ninth month in a row and hit a record high, due to a persistent lack of homes for sale.
The S&P CoreLogic Case-Shiller 20-city house price index rose a seasonally adjusted 0.6% in October compared to the previous month.
Home prices in the 20 major U.S. metro markets were up 4.9% in the last 12 months ending in October.
A broader measure of home prices, the national index, rose 0.6% in October and was also up 4.8% over the past year.
The 20-city and the national index are at an all-time high.
Key details: Detroit posted the biggest year-over-year home-price gains in October. Prices were up 8.1%.
San Diego and New York followed. Portland was the only city which saw prices fall in October.
Big picture: Home prices continued to march upwards even though mortgage rates hit 8% in October due to a serious shortage of homes for sale.
Though rising rates have spooked many, people are still buying homes, pushing demand and home prices up.
Yet few homeowners are interested in selling their homes and in giving up their 3% or 4% mortgage rate, which is creating a persistent shortage of resale inventory. Resale homes historically have formed nearly 90% of the market.
Until demand fizzles out or supply improves significantly, the market is likely to be in a similar state for the time being.
What S&P said: “U.S. home prices accelerated at their fastest annual rate of the year in October,” says S&P DJI’s Brian D. Luke said. “We are experiencing broad-based home price appreciation across the country, with steady gains seen in nineteen of twenty cities.”
“Home prices leaned into the highest mortgage rates recorded in this market cycle and continued to push higher,” he added. “With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation.”
Market reaction: Stocks
DJIA
SPX
were mixed in early trading on Tuesday. The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
was slightly over 3.9%.
