Home prices slipped in November, breaking a nine-month streak of gains, but were up year-over-year.
Prices were down 0.2% month-over-month from the month prior, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index. This was the first monthly dip since January 2023.
This was partly the result of mortgage rates spiking to peaks of nearly 8% in October 2023, driving demand down and forcing sellers to adjust their profit expectations.
“The house price decline came at a time when mortgage rates peaked, with the average Freddie Mac 30-year fixed rate mortgage nearing 8%, according to Federal Reserve data. The rate has since fallen over 1%, which could support further annual gains in home prices,” Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P DJI, said.
Prices were up YOY by 5.1%, however, an increase compared to the month prior’s 4.7% rise. Six cities clocked in at new all-time highs: Miami, Tampa, Atlanta, Charlotte, New York, and Cleveland. Detroit clung to its top spot for a third month in a row, seeing prices spike by 8.1%.
Seattle and San Francisco, two of the most expensive markets in America, saw prices decline by 1.4% and 1.3%, respectively.
By region, the Northeast (+6.4%) and Midwest (+6.3%) registered the biggest gains. But Luke noted that the spread of performance shrank in this round of data to its narrowest since Q1 2021.
“The tight disparity speaks to a rising tide across the country, with less evidence of micro-markets bucking the trend. The days of markets in the South rising double digits with markets in the Midwest remaining flat are over,” he said.
The latest Federal Housing Finance Agency House Price Index revealed similar trends, with September prices up 0.3% from October and 6.6% from a year earlier.
“U.S. house prices continued to appreciate in November, with year-over-year growth slightly above the historical average,” said Dr. Nataliya Polkovnichenko, Supervisory Economist in FHFA’s Division of Research and Statistics.
Price appreciation benefits current homeowners who are sitting on record-high levels of equity. But for buyers without that built-in spending power, the market is incredibly tough. Moody chief economist Mark Zandi called this upward pressure a “massive problem” for first-time buyers.
“Given the collapse in affordability, buying a home is not even remotely possible,” he wrote in a post on X, formerly Twitter.
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