The Housing Market Cooled in September

This is not a housing crash. But huge gains in home prices of recent years now appear to be a thing of the past.

Home values rose in September but at the slowest pace since January 2017, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index

Home prices increased 5.5 percent annually in September, down from 5.7 percent in August. The 10-City Composite annual rose 4.8 percent, down from 5.2 percent  The 20-City Composite rose 5.1 percent year-over-year, a drop from 5.5 in the previous month.

On a seasonally unadjusted basis, Case-Shiller’s 20-city index posted a moderate 0.3 percent gain. That is actually a slight increase from the 0.1 percent increase in each of the previous three months.

Home prices, however, are still rising faster than incomes and consumer prices.

Higher prices and rising interest rates make homes less affordable. The average rate on a 30-year fixed mortgage is a full percentage point higher than it was in November of 2017.

Despite the declines in tech stocks, the San Francisco and Seattle markets saw the highest year-over-year gains among the 20 cities tracked by Case-Shiller. San Francisco home prices jumped 9.9 percent and Seattle home prices rose 8.4 percent increase.

Over the very long term, prices tend not to appreciate more rapidly than inflation.