Home prices rose for the eighth consecutive month in September as the housing affordability crisis continued to deepen.
Prices increased 0.3% nationally in the period from August to September on a non-seasonally adjusted basis, the S&P CoreLogic Case-Shiller index showed Tuesday.
On an annual basis, prices are up 3.9% from the same time last year.
"U.S. home prices continued their rally in September 2023," said Craig Lazzara, managing director at S&P DJI. "Our National Composite rose by 0.3% in September, marking eight consecutive monthly gains since prices bottomed in January 2023.
The 10-city composite, which encompasses Los Angeles, Miami and New York, rose 4.8% annually, compared with a 2.5% increase in September. The 20-city composite, which also tracks housing prices in Dallas and Seattle, jumped 3.9% in September, which is also higher than the 2.1% uptick recorded the previous month.
There was a major discrepancy in the price gains in the 20 cities: Detroit saw a 6.7% annual gain, while San Diego posted a 6.5% price gain. New York followed with an increase of 6.3%.
On the other end of the spectrum, cities in the West posted some of the biggest declines. Las Vegas home prices fell 1.9%, edging out Phoenix with its 1.2% decline.
The Case-Shiller index reports with a two-month delay, meaning it may not capture the latest ongoings in the market.
The interest-rate-sensitive housing market entered a deep freeze last year after the Federal Reserve's aggressive interest-rate hike campaign.
But prices have quickly recovered as buyers adjust to higher mortgage rates and compete for a limited supply of homes.
The affordability problem is unlikely to be resolved anytime soon.
With mortgage rates continuing to hover near the highest level in two decades, sellers who locked in a low rate before the COVID-19 pandemic began in early 2020 have been reluctant to sell, leaving few options for eager would-be buyers.
The number of available homes on the market at the end of October was down a stunning 42% from the typical amount before the pandemic started, according to a recent report from Realtor.com.
"Mortgage rates have surged from historic lows to multidecade highs and sidelined both priced-out buyers and sellers who don’t want to forfeit cheaper mortgages and tax assessments locked in years ago," said Bill Adams, chief economist at Comerica Bank.