Recently, as per the reports of the S&P CoreLogic Case-Shiller Index, home prices have been rising. The prices increased 3.9% in September compared to a year earlier. In addition to that, the 30-year fixed mortgage rates also increased to 8%. However, despite increasing home prices and mortgage rates, rents are easing.
It seems high mortgage rates are not cooling off home prices. In the United States, home prices were 3.9% higher in September, as compared to the same month last year. Furthermore, as compared to August 2023, the prices made a 2.5% annual gain.
According to CNBC reports –
“Of the 20 metropolitan markets highlighted in the report, Detroit saw the biggest annual increase at 6.7%, followed by San Diego at 6.5% and New York at 6.3%. Three of the 20 cities, Las Vegas, Phoenix, and Portland, Oregon, reported lower prices compared with a year ago. Those cities were some of the biggest gainers in the first few years of the Covid-19 pandemic.”
Experts believe that the increase in mortgage rates suppressed the sale of homes heavily. As a result, the relative shortage of inventory for sale provided strong support for prices. However, in recent weeks, rates have eased off a bit, which, in turn, has led to a rise in the demand for mortgages.
As per 35 years of data on this index, home prices in the United States have risen 6.1% more than the median full calendar year increase.
On the other hand, despite the increase in home prices, rents are easing up. The median rent in the nation dropped by 0.9% from October to November. The benchmark also fell 3.5% from August 2022. However, rents are $250 more than what they were three years ago.
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