Despite rising mortgage rates, home prices in the U.S. surged by 3.9% in September compared to the previous year, up from a 2.5% gain in August, according to the S&P CoreLogic Case-Shiller Index. The 30-year fixed mortgage rate approached 8%, yet this did not deter the housing market’s momentum.
Among the 20 metropolitan markets analyzed, Detroit witnessed the highest annual increase at 6.7%, followed by San Diego at 6.5%, and New York at 6.3%. Notably, cities like Las Vegas, Phoenix, and Portland reported lower prices, a contrast to their earlier gains during the initial years of the pandemic. Craig Lazzara, managing director at S&P DJI, highlighted the robustness of the housing market, attributing it to a relative shortage of inventory offsetting the impact of increased mortgage rates.
Recent easing in rates has led to a modest uptick in mortgage demand. Year-to-date, national home prices have surged by 6.1%, surpassing the median full calendar year increase over more than 35 years of data. Lazzara remains optimistic about future results unless higher rates or external events trigger general economic weakness.
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