The CS HPI demonstrated rising housing prices as per the 3.9% rise for September relative to the previous 2.1% rise for August. Similarly, the 10-city composite reported a 4.8% increase which represented an all-time high, and the 20-city composite saw a 3.9% increase with Detroit reporting the highest YoY gains of 6.7%, followed by San Diego at 6.5%. On a month-on-month basis, the indexes saw an unadjusted rise of 0.3% each and an adjusted rise of 0.7%.
This report signalled that the housing market has been doing well, as of September, demonstrating both year-on-year and month-on-month gains. These increases, like those of construction spending, have been attributed to the lack of housing supply on the market which in turn makes prices dearer. The report also suggested optimism about the future of the housing market, however, this was prefaced with the assumption that external factors or higher rates do not lead to economic weakness (quite a big assumption). Going forth, despite the median home price falling in the most recent New Home Sales report, I expect home prices to continue to rise until the supply of new homes makes up for the deficit of existing ones, or, an economic downturn forces people to start selling. I think the latter is more likely…
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