By Nathalie Voit

U.S. home-price growth slowed in September from its record annual rate of 19.8% in August, S&P CoreLogic Case-Shiller data revealed.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, the benchmark indicator for U.S. home prices, sat at 19.5% in the year that ended in September, down from 19.8% the month before.

The September 2021 Case-Shiller Index posted strong home-price gains even as housing prices began to ease up from their record streak over the summer.

“Housing prices continued to show remarkable strength in September, though the pace of price increases declined slightly,” said Craig J. Lazzara, Managing Director at S&P DJI.

Year-over-year, the Case-Shiller 10-city index increased 17.8% in September, down from 18.6% in August. The 20-city index posted a 19.1% annual gain, down from 19.6% the previous month. Price growth slowed in 14 of the 20 metropolitan areas.

Case-Shiller data found the highest year-over-year gains in Phoenix, Tampa, and Miami. Phoenix took the top spot in the index, posting the fastest home-price growth in the country for the 28th consecutive month at 33.1%. Tampa came in second, reporting a 27.7% year-over-year price increase. Miami followed at 25.2%.

Housing prices were highest in the South and the Sunbelt region, which posted 24.3% and 24.2% home-price growth, respectively. However, all regions logged double-digit gains, the report said.

U.S. home sales are now on track to hit their highest level in 15 years as housing demand remains robust and buyers compete for a limited supply of houses.

According to a report from the National Association of Realtors, existing-home sales in October increased 0.8% from September to a seasonally adjusted annual rate of 6.34 million. Additionally, the median-existing home price in October climbed to $353,900 from a year before, a yearly gain of 13.1%.

Soaring home prices are pushing some buyers out of the market. In October, the number of first-time homebuyers fell from 32% a year earlier to 29%, the NAR said.

Rising mortgage rates could further dampen demand. The average 30-year fixed-rate mortgage was 3.1% as of Nov. 24, according to Freddie Mac.  

“The strength in the U.S. housing market is being driven by households’ reaction to the Covid pandemic, as potential buyers move from urban apartments to suburban homes,” Lazzara said.