Housing Market's Growth Shows More Signs of Slowing

Growth in the housing market is starting to slow, according to the latest S&P CoreLogic Case-Shiller Index, which was up 19.5% year over year in September and down from the 19.8% increase the month prior. 

It was the first deceleration after 14 consecutive months of acceleration and another indicator that the surge in home prices may be starting to flag. 

September’s month-to-month growth slowed to a non-seasonally adjusted 0.99%, down from a 1.21% increase in August.

While the monthly gains have slowed, CoreLogic noted they are still notably above the 2006-2019 average of 0.35% decline, suggesting that the September increase is still beating the seasonal decline typically seen in that month.

As monthly gains continue to decline, the authors of the report say the rate of annual home price appreciation will as well.

CoreLogic says the current slowdown is indicative of encouraging signs of a return to a more sustainable balance between buyers and sellers as the share of homes that are selling over the asking price has declined from the summer peaks.

The firm predicts the rate of growth will slow considerably from the current, near-20% annual increases. Home price appreciation, in short, will remain strong but there is still a deep disparity between supply and available for-sale homes.

The Omicron variant of the coronavirus is a wildcard in the market which CoreLogic says may end up extending the work-from-home practices this winter and increase demand for single-family homes with more indoor and outdoor space.

For the 27th consecutive month, Phoenix had the strongest home price growth among 20 markets, surging 33.1% in September, but down from August’s non-seasonally adjusted rate of 33.3%.

Home price growth in San Diego, which has been trending near the top of the 20-city list since the onset of the pandemic, slowed to a 25% annual increase, bumping it down to the 5th place for strongest home price growth.