Photo: David E. Lucas, Wikimedia Commons, Public domain. Image resized.
U.S. home prices rose 1.2% in September from a year earlier, the slowest September pace since 2011, according to First American Data & Analytics’ monthly Home Price Index. Prices were flat from August, and growth from July to August was unrevised at 0.2%.
Prices still rising in every tier
Despite the slowdown, annual price growth stayed positive for starter, mid-tier and luxury homes. First American Chief Economist Mark Fleming said luxury home prices outpaced starter-home prices in roughly 70% of the top markets the firm tracks, a gap he tied to higher mortgage rates, which hit buyers at the lower end harder because they have less room to absorb bigger monthly payments.
The strongest starter-home gains were in Grand Rapids, Michigan (+5.5% year over year), Milwaukee (+5.2%), Cleveland (+5.1%) and Philadelphia (+5.0%).
Rates and rate lock-in
“The recent increase in mortgage rates may further constrain affordability and strengthen the rate lock-in effect, limiting both the demand and the supply of homes for sale,” Fleming said. He added that homeowners choosing to stay put rather than sell into a higher-rate market continues to put a floor under prices.
JBizNews Desk | Santa Ana, Calif.
© JBizNews.com. All rights reserved. Unauthorized reproduction or redistribution is strictly prohibited.
