Despite a surge in mortgage rates, home prices continued to rise, registering a 3.9% increase in September compared to the previous year, according to the S&P CoreLogic Case-Shiller Index. This growth coincided with a climb in the 30-year fixed mortgage rate towards 8%.
While rents show signs of easing, home prices are currently nearly 10% more expensive than in 2008, with real home prices standing 80% above the 130-year historical average, as reported by Reventure.
These historically high prices persist amid a 40% shortage in housing supply compared to the historical average, despite mortgage demand being at its lowest since 1994, with the median homebuyer facing a $3000 monthly payment—marking truly unprecedented times in the real estate market.
Needless to say, the housing market has never been less affordable.
Even after accounting for wage growth, affordability is at record lows.
As rates continue to rise, this trend is becoming more prominent.
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) November 30, 2023
Home prices kept rising even as mortgage rates surged, S&P Case-Shiller says
- Home prices were 3.9% higher in September compared with the same month a year earlier, according to the S&P CoreLogic Case-Shiller Index.
- The growth coincided with the 30-year fixed mortgage rate’s climb toward 8%.
- Rents are easing, however, while home prices rise.