Home Prices Continued to Decelerate In November
Demand picked up in the final month of 2021 as buyers became increasingly concerned that rising interest rates will make buying a home out of reach.
The S&P CoreLogic Case-Shiller Index slowed for the third consecutive month in November, posting a 18.8% increase year over year, which was down from the 19.03% increase the month prior.
While slower than the year over year growth for October, the high double-digit increase for November illustrated continued strength in prices despite higher mortgage rates, affordability constraints and continued lack of supply.
“Coming into 2022, most housing market indicators, such as pending sales, list-to-price ratios and inventory levels, continue to suggest robust demand and worsening inventory levels than we saw at this time in 2021,” according to CoreLogic.
In fact, even though year over year figures declined, CoreLogic noted that the month-to-month index picked up pace to a non-seasonally adjusted 0.90%, up from a 0.82% increase in October.
“Reacceleration in monthly gains is consistent with some other housing market indicators, which suggested demand picked up in the final month of 2021 as buyers became increasingly concerned that rising interest rates will make buying a home out of reach,” the firm suggested.
With the deceleration nationally, the CoreLogic 10- and 20-city composite indexes also continued to slow from summer peak gains, and were up 16.8% and 18.3% year over year, respectively.
The report noted these indexes recorded gains of 19.2% and 20%, respectively with robust demand in smaller, warmer and more affordable areas.
Phoenix and Tampa continued as the markets with the top price surges with Washington, DC and Minneapolis remaining as the weakest.
Phoenix had the strongest home price growth among the 20 markets, rising 32.2% in November, barely down from October’s non-seasonally adjusted rate of 32.3% with Tampa at number 2 with a 29% gain, up from 28% the month before.
Washington and Minneapolis continued on the bottom of the list, up 11.1% and 11.2% in November.
In terms of demographics, low-tier price growth slowed from 19.9% to 19.7%, while high-tier price growth continued to accelerate from 10% to 20.1%.
However, CoreLogic stressed deceleration doesn’t mean prices are dropping. “In November, national home prices were 50% higher than the previous peak. All metros are now at or above their previous peaks.”