Home prices declined in September from the prior month as higher interest rates made buyers more cautious.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, fell 1% in September from August, the third straight month-over-month decline.
On a year-over-year basis, the index rose 10.6% in September, down from a 12.9% annual rate the prior month.
The pandemic-driven housing-market boom reversed abruptly this year due to a rapid surge in mortgage rates, which made home-buying far less affordable and pushed many buyers out of the market. Existing-home sales fell for nine straight months through October.
Consumer sentiment toward the housing market fell in October to a record low in data going back to 2011, according to Fannie Mae.
The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay and reflects a three-month moving average. Homes usually go under contract a month or two before they close, so the September data is based on purchase decisions made earlier in the year.
Many economists expect prices to continue to slide from their spring peaks, with some calling for year-over-year price declines in 2023.
In the Case-Shiller 20-city index, metro areas on the West Coast suffered the biggest month-over-month price declines. Home prices in both San Francisco and Seattle fell 2.9% in September from August.
“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be more expensive and housing becomes less affordable,” said
Craig Lazzara,
managing director at S&P Dow Jones Indices. “Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
The average rate on a 30-year fixed-rate mortgage was 6.58% in the week ended Nov. 23, up from 3.1% from a year earlier, according to housing-finance agency
The median existing-home price rose 6.6% in October from a year earlier to $379,100, according to the National Association of Realtors.
The Case-Shiller 10-city index gained 9.7% over the year ended in September, compared with a 12.1% increase in August. The 20-city index rose 10.4%, after an annual gain of 13.1% in August. Price growth decelerated in all of the 20 cities.
Economists surveyed by The Wall Street Journal expected the 20-city index to gain 10.9%.
Miami had the fastest annual home-price growth in the country, at 24.6%, followed by Tampa, at 23.8%.
A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found an 11% increase in home prices in September from a year earlier. The FHFA index rose 0.1% in September from the prior month on a seasonally adjusted basis.
Write to Nicole Friedman at nicole.friedman@wsj.com
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