In October, housing costs continued to rise in the United States.
The result for the mentioned month of this year, which became known on Tuesday, December 26, indicates that home prices in the United States have reached a new record level. In this case, it should also be mentioned that in the American sphere of real estate in October, high mortgage rates became another negative factor. The increase in the cost of housing in the United States in the specified month was recorded for the ninth time in a row.
Currently, the American housing market is characterized by the lowest level of affordability in a generation.
Mortgage rates in the United States remained above the 7% level in October. This figure is the highest in 23 years. Experts note that historically low inventory continues to provoke an increase in the cost of housing.
Prices in the mentioned market increased by 0.6% in October compared to the previous month. This information is based on seasonally adjusted data from the S&P CoreLogic Case-Shiller National Home Price Index in the United States.
The national composite index, covering all nine United States Census divisions, reported a 4.8% annual change in October from the year before.
Brian D. Luke, head of commodities, real, and digital assets at S&P DJI, said that in the specified month, the growth in the cost of housing in the United States showed the highest level of intensity since the beginning of this year.
One of the reasons for the current state of affairs in the real estate market is stubbornly low inventory. People who had the financial ability to withstand high mortgage rates or paid in cash competed for several affordable homes. Against the background of the fear of many buyers that refusing to purchase at a particular moment in the future will lead them to higher interest rates, prices have increased.
Detroit in October became the city with the most rapid increase in housing costs among other US cities. Prices here increased by 8.1% year-on-year. For the second month in a row, Detroit has become the city with the fastest growth in housing costs.
Mortgage rates in the United States increased to 7.79% by the end of October. In August, this figure was 6.9%.
Sales in the secondary American housing market fell to a new 13-year low in October. Danielle Hale, Chief Economist of the company Realtor.com, stated that this trend is the result of the fact that rising mortgage rates have reduced the purchasing power of many citizens.
It is expected that high housing prices will continue next year. Selma Hepp, chief economist at CoreLogic, says that this market is approaching the end of the current year in the context of a more positive situation than predicted just a month ago. However, the optimistic end of 2023 does not mean that the state of affairs will be more favorable next year. According to Selma Hepp, with lower mortgage rates in early 2024, housing demand will increase and provoke pressure on prices, which will repeat the sequence of factors and circumstances that were observed in the first weeks of 2023.
As we have reported earlier, Climate Alpha Raises Seed Funding to Help Real Estate Sector Analyze Climate Change Impact.
