The month-over-month Case-Shiller House Price Index reveals a 1.03% increase in October after higher rates over the past 14 months. Though prices are still historically high, updated monthly gains suggest that year-over-price growth is finally beginning to decelerate, according to the CalculatedRisk Newsletter. Year-over-year house prices rose 17.4 percent from October 2020 to October 2021, but a 0.9 percent price change for September held steady in the following month.
If months-of-supply is high, prices decline. If months-of-supply is very low (like now), prices rise quickly.
We are seeing the expected deceleration in house price growth, and this trend will probably continue for at least a few more months (more on this tomorrow). My sense is the Case-Shiller National annual growth rate of 19.99% in August was probably the peak YoY growth rate, however, since the normal level of inventory is probably in the 4 to 6 months range - we’d have to see a significant increase in inventory to sharply slow price increases, and that is why I’m focused on inventory!
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