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The September S&P CoreLogic Case-Shiller Index demonstrated the impact of housing demand combined with limited supply, as home prices continued to rise. National home prices increased by 3.9% within the year, while the 10- and 20-city composite indices grew by 4.8% and 3.9%, respectively. This growth is also reflected in month-over-month price acceleration for all three indices. Existing home sales, however, fell to a 13-year low in September, as high prices drove buyers towards the more affordable new home market.

Regional Home Price Trends

While existing home sales fell in September, pending home sales and new home sales increased compared to the previous month. This indicates a slightly more energetic housing market looking forward. Higher mortgage rates usually hurt buyer demand, but a renewed climb can encourage shoppers to lock in a rate before it increases. In fact, 46% of consumers in a September survey reported expecting mortgage rates to climb higher in the next 12 months.

Implications for Homebuyers, Sellers, Renters, and the Housing Market

While the national housing market continues to see moderate price growth, many local markets, such as areas on the third quarter’s WSJ/ Emerging Housing Markets list, experienced outsized price growth as buyer activity remained concentrated in locales with low-priced homes and a relatively low cost of living. The Northeast (+5.3%) and the Midwest (+5.0%) saw the strongest price growth among the regions, while the West (-1.3%) remained weakest.

Though high home prices and elevated mortgage rates mean that financing a home purchase remains out of reach for many households, the rental market offers a glimmer of hope. Rent prices fell for the fifth consecutive month in September as multi-family completions climbed both month-over-month and year-over-year. Rental properties, especially more affordable units, were quickly snapped up in the second quarter of 2022, indicating strong rental demand amid waning demand in the for-sale space.

Orginal article: Link To Article – provided by Kansas City Realtors