Report: Rising home prices slowed at historic pace in August

Oct. 25 (UPI) -- The increase in home prices around the country slowed down in August faster than at any other time in history as the market adjusts to higher interest rates.

According to the S&P CoreLogic Case-Shiller Home Price Index, home prices in August were 13% higher than at this time in 2021, down from 15.6% in the July year-to-year comparison. The 2.6% drop was the largest decline since the index started in 1987.

The pricing slowdown appeared to be widespread. The prices in the index's 10-city composite, which covers the largest metropolitan housing markets in the United States, jumped 12.1% in August over a year ago, compared to the 14.9% rise in July.

In the Case-Shiller 20-city composite, which includes a wide array of metropolitan areas, prices rose 13.1% in August, compared with a 16% jump in July.

"The forceful deceleration in U.S. housing prices that we noted a month ago continued in our report for August 2022," said Craig J. Lazzara, managing director at S&P DJI, in a statement. "Further, price gains decelerated in every one of our 20 cities. These data show clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since."

Lazzara said despite the ongoing deceleration, August's housing prices remain significantly higher in all 20 cities. Florida remained the state with the sharpest price gain as Miami (+28.6%) and Tampa (+28%) ranked as the top two cities.

"As the Federal Reserve moves interest rates higher, mortgage financing becomes more expensive and housing becomes less affordable," Lazzara said. "Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to decelerate."