On Tuesday, US single-family home prices slowed further in September as higher mortgage rates reduced demand. Reportedly, the S&P CoreLogic Case Shiller national home price index declined 0.8 per cent month-over-month in September. Monthly house prices dropped in July for the first time since late 2018. Also, house prices increased 10.6 per cent Y-o-Y in the month, slowing from August’s increase of 12.9 per cent.

It is to be noted that the housing market has been impacted by aggressive Federal Reserve interest rate hikes aimed at controlling high inflation by dampening demand in the economy. The 30-year fixed mortgage rate breached 7 per cent in October for the first time since 2002. Though the rate retreated to an average of 6.58 per cent last week, it remains well above the 3.10 per cent average during the same period the previous year.

Reportedly, sales of previously owned homes logged their ninth straight monthly fall in October. On the other hand, single-family homebuilding and permits for future construction declined to the lowest levels since May 2020. However, tight supply will likely keep a floor under house prices. A rise in remote work during the pandemic led to a housing market boom, pushing prices to record highs.