Home Price Growth is Slowing

A .3% dip marks the first price growth deceleration in nearly two years.

According to Fortune, home prices rose faster this year than any period in tabulated U.S. history: Between Aug. 2020 and Aug. 2021, U.S. home prices notched a 19.8% gain—the largest uptick on record, and well above the 12-month peak (14.1%) in the lead up to the 2008 housing crash.

But there’s a bit of good news for homebuyers. The latest reading of the S&P CoreLogic Case-Shiller Index, the leading measure of residential real estate prices, finds year-over-year U.S. home prices rose 19.5% between Sept. 2020 and Sept. 2021. That slight .3% dip marks the first price growth deceleration in nearly two years.

At first glance, that tiny dip hardly looks significant. However, a closer look at the numbers shows this deceleration is larger than the top-line figure would suggest. While home prices are up 19.5% year-over-year, most of that uptick occurred back during the red-hot stretch this spring and summer. Indeed, the month-over-month jump in September was just 1.18%, which is far below the pace prices would need to rise to maintain a 19.5% annual rate or return.

And this deceleration in home price increases is just getting started. At least that’s what industry insiders are telling Fortune. What’s going on? This fall the housing market began to slow down a bit as seasonality—a cooling period that happens most years around the holiday and vacation season—returned to the market after it was absent last year. Additionally, some would-be home buyers finally started balking at sky-high prices. This has been happening for a few months, however, and lagging sales data means we had to wait a while to see that first price deceleration on paper.

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