Home price growth accelerated in November alongside high rates

Home prices increased 5.1 percent between November 2022 and November 2023, despite falling 0.2 percent from October.

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United States home price growth increased its year-over-year gains in November, but decreased month over month for the first time since January 2023, according to new data.

Data released Tuesday via the S&P CoreLogic Case-Schiller Index revealed that home prices increased 5.1 percent between November 2022 and November 2023, a pick-up from the previous month which saw annual growth of 4.7 percent.

On a monthly basis, national home prices fell by 0.2 percent,  the first national decrease in 10 months. However, eight of the 20 largest metro areas posted month-over-month increases, according to the S&P.

Home prices’ continued acceleration in November came during what is traditionally the slowest homebuying season of the year. 

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S&P CoreLogic Dow Jones Indices

“Home prices were rising strongly in November, despite mortgage rates hitting 23-year highs,” Bright MLS Chief Economist Dr. Lisa Sturtevant said in a statement. “Low inventory has fueled widespread home price appreciation, and housing affordability hit a record low in 2023.”

The Federal Housing Finance Authority House Price Index, also released on Tuesday, found that home prices were up 6.6 percent from a year ago in November and 0.3 percent from the month before.

The 10 and 20 city composites, which track price growth in the nation’s largest cities, posted annual increases of 6.2 percent and 5.4 percent respectively, while posting a 0.1 and 0.2 percent month-over-month decrease.

For the second month in a row, Detroit reported the highest year-over-year gain among the 20 largest cities, with an 8.2 percent increase. It was followed by San Diego with an 8 percent increase and both New York City and Cleveland with 7.4 percent increases.

Portland, Oregon, saw prices fall 0.7 percent year over year, making it the only major city on the list to have lower prices than a year ago — the third straight month it had that distinction. The top three slowest growing markets were found in the West, with Denver following Portland with just a 1.5 percent increase from a year ago and Seattle with just a 1.6 percent annual increase.

The slowdown in price growth in markets like Seattle and Denver suggests that some expensive cities may be reaching their tipping point.

“There is some evidence some high-cost markets might be approaching price levels that cannot be sustained in 2024,” Sturtevant said. “In Seattle, for example, the Case-Shiller Home Price Index revealed that prices fell 1.4 percent between October and November, the third month in a row of price declines. Prices were down for the fourth consecutive month in the Denver metro area.”

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