Home prices hit record highs, with more gains likely  

Despite borrowing rates peaking in October around the 8% mark, the latest Case-Shiller data shows that home prices continued to accelerate as consumers faced worsening affordability. 

The S&P CoreLogic Case-Shiller National Home Price Index revealed a 4.8% annual increase in US home prices for October, which represents a gain from the 4% change reported the previous month. The national composite has seen nine consecutive monthly gains and October represented the strongest national home price growth of the year. 

This puts the national annual index at the highest level in at least the last ten years, historical data shows, and economists don't see it slowing anytime soon. 

Home prices see record gains in many major markets

The more refined 10-city and 20-city indexes also saw gains in October as well, posting a 5.7% annual improvement and 4.9% uptick, respectively. Both city indexes are at all-time highs, the report indicated. 

According to the data, Detroit witnessed the biggest annual home price gain at 8.1%, while San Diego home prices improved by 7.2% in the last year and New York City home prices increased 7.1%. Portland was the only city that reported negative home price growth, falling 0.6% in the past 12 months. 

Eight cities in all remain at all-time high home price growth, including Miami, Atlanta, Chicago, Boston, Detroit, Charlotte, New York and Cleveland. 

"We are experiencing broad-based home price appreciation across the country, with steady gains seen in nineteen of twenty cities," said S&P DJI Head of Commodities, Real & Digital assets Brian D. Luke. "This month's report reflects trendline growth compared to historical returns and little disparity among cities and regions."

Seemingly affirming the Case-Shiller outlook, the Federal Housing Finance Agency seasonally adjusted monthly House Price Index also posted a big gain in October. The index improved 0.3% from the previous month and 6.3% over the last year. 

Over the last year, the census divisions with the highest home price growth according to the FHFA were the Middle Atlantic at 9.9%, New England at 9.7%, and East North Central at 9.1%. No regions posted negative growth, though the Pacific and Mountain regions tallied the lowest at 2.8% and 2.6% respectively. 

Economists see more price appreciation — and more sales

The trend of record annual home price growth could continue.

"Home prices leaned into the highest mortgage rates recorded in this market cycle and continued to push higher," Luke also noted in the Case-Shiller report. "With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation."

On the latest Case-Shiller numbers and how it relates to current health of the housing market, Realtor.com chief economist Danielle Hale predicts a stronger buying season over the winter and spring.

"Looking ahead, mortgage rates have made a significant about-face in recent weeks, slipping notably below 7%," she said. "While this has not yet translated into a big sales recovery, November existing home sales increased for the first-time in 5 months, suggesting that if rates can hold onto recent improvements, buyer demand may be sufficient to drive a stronger home sales season than originally anticipated in Realtor.com's 2024 Housing Forecast."

Additionally, CoreLogic's own chief economist, Dr. Selma Hepp, sees more appreciation ahead.

"With mortgage rates dropping, demand for homes in early 2024 is likely to be strong and will again put pressure on prices, similar to trends observed in early 2023," she said. "In addition, given the stronger seasonal gains seen in early 2023, annual home price appreciation should accelerate this winter before slowing again next year. Still, most markets will continue to reach new home price highs over the course of 2024."