According to the most recent (Oct. '23) Case-Shiller Home Price Index and FHFA’s House Price Index, home prices in the US have been increasing for several months now. Learn more about the reports and what they indicate for potential buyers and sellers.
The Case-Shiller Home Price Index, which is considered the “gold standard” for appreciation, showed home prices nationwide rose 0.6% from September to October after seasonal adjustment, marking the ninth consecutive month of gains. Prices were also 4.8% higher than in October of last year, which is the fastest annual rate of the year. S&P DJI’s Head of Commodities, Brian D. Luke, noted that the report “reflects a rising tide across nearly all markets.”
The Federal Housing Finance Agency’s (FHFA) House Price Index also saw home prices rise 0.3% in October, with their index setting new record highs in home prices every month since February.
For a home buyer, the consecutive months of rising home prices, as indicated by the Case-Shiller Home Price Index and FHFA’s House Price Index, suggest a competitive and potentially more expensive market. The 4.8% year-over-year increase implies a faster pace of appreciation, making it crucial for buyers to act promptly and be prepared for potential higher costs.
Additionally, the records of consistent price highs in FHFA's index indicate a trend that might affect the affordability and choices available in the housing market, emphasizing the importance of thorough research and timely decision-making for prospective home buyers.
Sellers may find themselves in a advantageous position with increased demand and limited inventory, providing an opportunity to maximize their returns. With interest rates on a new decline, inventory may open up slightly as sellers decide the time is right for them to move. The records of consistent price highs in FHFA's index further suggest a seller's market, where sellers may have more negotiating power. Overall, it appears to be a favorable time for sellers to list their homes, potentially attracting competitive offers and achieving profitable sales.
Note that FHFA’s report measures home price appreciation on single-family homes with conforming loan amounts, which means it most likely represents lower-priced homes. FHFA also does not include cash buyers or jumbo loans, and these factors account for some of the differences in the two reports.
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