The numbers: The S&P CoreLogic Case-Shiller 20-city price index posted a 18.3% year-over-year gain in November, down slightly from 18.5% the previous month. On a monthly basis, the index increased 0.9% between October and November.
Meanwhile, the Case-Shiller national home price index demonstrated 18.8% growth between 2020 and 2021 in November, also down from the prior month.
The Federal Housing Finance Agency released its own house price index, which demonstrated that prices rose 17.5% on an annual basis in November.
“House price levels remained elevated in November, but the data indicate a pivot,” Will Doerner, supervisory economist in the FHFA’s division of research and statistics, said in the report.
“The last four months reflect average gains of 1.0 percentage point, down from the larger prior changes during the spring and summer months,” he added. “This new trend is a welcome shift but still twice the monthly average we have seen in the last 20 years, which echoes concerns about access and affordability in housing markets.”
Key details: Once again, Phoenix recorded the highest rate of home-price growth in the country in November, with a 32.2% year-over-year increase. Two Florida cities closely followed: Tampa with a 29% uptick and Miami with a 26.6% gain.
Overall, the Case-Shiller index noted that price increases were larger in November than in October for 11 of the 20 major cities that are studied each month.
Regionally, the FHFA index found that the highest rate of home-price growth over the past year has occurred in the Census Bureau’s mountain division, which includes states like Colorado, Idaho and Arizona.
The big picture: Americans aren’t likely to see home-price growth hit the levels seen last summer, but that doesn’t mean prices are dropping. Mortgage rates are on a steady upward climb as of late, which will take some wind out of the housing market’s sales.
But the primary factor behind the fast pace of home-price appreciation over the past couple years — the short supply of homes for sale — isn’t likely to change anytime soon. So long as mortgage rates don’t price out too many buyers, demand for the few homes that are on the market should stay strong, which will continue to push home prices higher.
And in the most sought-after markets, such as Arizona and Florida, demand will remain outsized in this continued era of remote working. Many markets in these regions are poised for explosive growth in the near future — meaning home prices likely will continue to soar.
Looking ahead: “Despite edging mortgage rates and some seasonal moderation in the housing markets, the rate of home price appreciation continues to track well above sustainable levels. And given the economy’s strong wage growth, low supply and continued competition among millennials approaching home-buying age, demand pressures will continue to support home price acceleration, with home price indexes likely to continue hovering close to 20% in the coming months.,” said Selma Hepp, deputy chief economist at CoreLogic.