Home prices continued to rise in November
Prices improved 5.1% annually, the latest Case-Shiller report indicates, but a small dip between October and November ended a streak of monthly gains.
- Annual home price growth rose nationally in November to 5.1%, beating October’s gain of 4.8%.
- On a monthly basis, however, prices fell 0.2% from October to November, the first decline in nine months.
- Some experts predict home prices will continue to increase in 2024 even as low inventory and high demand remain issues for buyers.
Even as mortgage rates surged to nearly 8% in the fall, home prices continued to rise in November after hitting record highs the month before.
According to the latest Case-Shiller report, the national index posted a 5.1% annual gain in November — the fifth consecutive month of year-over-year increases. The October index saw a 4.8% annual increase, while national home prices rose 3.9% between September 2022 and September 2023.
At the same time, the report indicated that 12 of the 20 biggest metro areas saw prices decline between October and November, while national home price growth dipped by 0.2% month-over-month, ending a nine-month streak of gains.
Separately, the Federal Housing Finance Agency numbers for November showed a 6.6% uptick in annual home prices but a more modest 0.3% improvement from the previous month. The small monthly increase remained unchanged from October. The FHFA uses loan purchasing data from Fannie Mae and Freddie Mac across all 50 states to produce its housing index.
Price growth remains strong in most large markets
The 10-city and 20-city annual composite indexes were also up in November, increasing by 6.2% and 5.4%, respectively.
Fifteen metros posted higher annual price growth in November while five reported slowing annual price growth or no change. The top markets for growth were Detroit and San Diego, which posted annual gains of 8.1% and 8%, respectively. New York and Cleveland were close behind, with home prices improving by 7.4% in both metros.
Six cities reached new highs for annual price growth: Miami, Tampa, Atlanta, Charlotte, New York and Cleveland. When looking at the national picture, however, price growth reflected "the narrowest spread of performance across the nation since the first quarter of 2021," Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P DJI, said in the report.
"The tight disparity speaks to a rising tide across the country, with less evidence of micro-markets bucking the trend," Luke added.
Portland, Oregon, is the only city to repeatedly report an annual price decline, slipping 0.7% over the last year.
Continued annual gains are likely
Even as affordability remains a major hurdle for many buyers, some experts predict continued home price growth this year.
"The main reason prices continue to rise is because inventory is so low, and there is little to suggest that the supply picture is going to change dramatically in 2024," Bright MLS Chief Economist Dr. Lisa Sturtevant said of the latest data, adding that some of the costliest cities may be "approaching price levels that cannot be sustained in 2024."
CoreLogic Chief Economist Dr. Selma Hepp also expects homes to get more expensive this year.
"More recent declines in mortgage rates along with continued imbalance between pent-up demand and lacking supply suggest home prices will continue to rise in 2024," she said.