Home prices in November showed a slowdown, with a decrease in both nationally and in metropolitan areas. However, some cities experienced new highs in home prices. Overall, the market is cooling, but there are still pockets of growth.
Troy D. Hanson
January 30, 2024
Home prices in November showed a slowdown in the market, ending a nine-month period of stronger gains. Although the overall trend is cooling, there are still some areas that remain red hot.
According to the seasonally-adjusted S&P CoreLogic Case-Shiller Home Price Indices, prices in November rose at the slowest pace since February. Nationally, seasonally adjusted home prices increased by 0.24%, compared to October's 0.59% month-over-month gain. In a similar trend, prices in a 20-city index tracking large metropolitan areas rose by 0.15%, slower than the 0.63% gain seen the previous month.
As we enter the winter season, it is not uncommon to see a decline in home prices. In November, unadjusted prices dropped both nationally and in the 20 large metropolitan areas. Nationally, prices decreased by 0.18%, while in the metropolitan areas, prices declined by 0.24%. Historical data from Case-Shiller indicates that, on average, national prices dip by 0.05% from October to November.
In November, the data shows that U.S. home prices edged downward from their all-time high. Brian D. Luke, head of commodities, real & digital assets at S&P Dow Jones Indices, pointed out that the streak of nine monthly gains ended, bringing the index back to levels last seen over the summer months.
Despite the cooling trend, there were still cities experiencing new highs in home prices. Miami, Tampa, Atlanta, Charlotte, New York, and Cleveland all saw unadjusted prices reach their highest levels since at least 1987.
On a year-over-year basis, home prices nationally were 5.1% higher than the previous year. In the 20-city index tracking large cities, prices were 5.4% higher. This represents the largest gain since November 2023, although it fell slightly short of consensus expectations of a 5.7% increase, according to FactSet. The only metropolitan area that saw prices lower than the previous year was Portland.
A drop in mortgage rates from their peak in October may help sustain home price gains. Luke mentioned that the rate has since fallen by over 1%, which could provide support for further annual gains in home prices.