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Home-Price Growth Slows for the First Time Since May 2020

By Jacob Passy|Nov 30, 2021

The numbers: Home-price growth is slowing

Home-price appreciation occurred at a slower pace in September, according to a major price barometer released Tuesday, suggesting the market is cooling after over a year of frenzied sales.

The S&P CoreLogic Case-Shiller 20-city price index posted a 19.1% year-over-year gain in September, down from 19.6% the previous month. On a monthly basis, the index increased 0.8% between August and September.

What happened

The separate national index from the Case-Shiller report showed a 19.5% gain, down from a 19.8% increase in August.

Phoenix led the country in terms of home-price growth, with a 33.1% increase, followed by Tampa, Fla., and Miami. Only six of the 20 major cities that the report tracks notched larger price increases in September than in August, though prices did continue to increase in all 20 cities.

“If I had to choose only one word to describe September 2021’s housing price data, the word would be ‘deceleration,’” Craig J. Lazzara, managing director at S&P DJI, said in the report. “Housing prices continued to show remarkable strength in September, though the pace of price increases declined slightly.”

The big picture: Some markets are cooling faster than others

At the beginning of the year, it was not uncommon to see homes on the market attract multiple competing bids, forcing buyers in some markets to resort to waiving contingencies just to have a shot at locking in a contract. The high demand for housing, when combined with the limited inventory of homes for sale, was a perfect recipe for record-breaking price increases.

Today’s market has taken a step back. “Today’s S&P Case Shiller Index spotlights an early fall housing market with fewer families actively looking for homes after the start of a new, and mostly in-person, school year,” said George Ratiu, manager of economic research at “Home prices remained elevated, but the pace of gains moderated, as an increase in new listings offered buyers more options.”

Indeed, many homeowners have decided it’s time to list their homes for sale finally, after waiting for a very long time due to the COVID-19 pandemic and the competitive market. So far, though, this influx of sellers is causing some markets to cool more rapidly than others. Data from shows that 17 of the 50 largest metropolitan areas saw declines in the listing prices for homes in October compared with a year ago.

“For buyers, the landscape looks more promising as we head into 2022,” Ratiu said.

What they’re saying

“COVID concerns will no doubt keep some sellers out of the market, but high prices should bring some inventory back online. Also, some buyers will likely try to get ahead of a rise in mortgage rates that will likely accompany Fed tapering,” Rubeela Farooqi, chief U.S. economist at High-Frequency Economics, wrote in a research note.

“The slowing of monthly price acceleration while home purchase activity remains strong suggests that the market is trending toward a healthier balance between buyers and sellers. In the coming months, we are likely to see a continued slowing of monthly and annual home price gains while total 2021 home purchases will outpace last year’s purchases,” said Selma Hepp, CoreLogic’s deputy chief economist.

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