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Despite higher mortgage rates reaching nearly 8%, home prices in the U.S. rose by 3.9% in September compared to the previous year.
The S&P CoreLogic Case-Shiller Index reported a 3.9% increase in home prices nationally, reflecting a stronger market compared to the 2.5% gain in August.
Detroit led with the highest annual increase at 6.7%, followed by San Diego at 6.5%, and New York at 6.3%. In contrast, cities like Las Vegas, Phoenix, and Portland reported lower prices.
The housing market demonstrated resilience, with the impact of increased mortgage rates offset by a relative shortage of available inventory, according to Craig Lazzara of S&P DJI.
Mortgage rates have slightly eased in recent weeks, leading to a modest increase in mortgage demand and potentially influencing future market dynamics.
Nationally, home prices have risen by 6.1% year to date, surpassing the median increase seen in more than 35 years of data from the S&P CoreLogic Case-Shiller Index.
While home prices rise, national median rent dropped by 0.9% in November, attributed to seasonal factors and a surge in new apartment supply.
A construction boom has contributed to a record amount of new apartment supply, impacting the rental market and potentially giving renters more negotiating power.
Rent growth is expected to be moderated by increased supply in the coming year, with the national apartment vacancy rate at 6.4%, slightly higher than the pre-pandemic average.