First American reports weakest September US home-price growth since 2011

First American Financial’s Data & Analytics division released its September home-price index report on October 26. US home prices rose 1.2% from a year earlier, the weakest September annual increase since 2011.^[1]

The index tracks residential price changes nationally, by state and across metropolitan areas, with a reporting lag of less than four weeks.^[1]

The 1.2% national annual increase indicates a limited addition to homeowners’ wealth from rising property values.^[1] Slower appreciation may make households more cautious about renovations and large home-related purchases. For builders, a continuation of this trend could narrow the scope to grow revenue through higher prices, making sales volume more important.

Slower price growth can help buyers’ incomes and down-payment savings gradually catch up with home prices, but financing costs still shape affordability. The 10-year Treasury yield, an important reference for mortgage pricing, stood at 5.00% on October 26, unchanged from October 23 and down 0.15 percentage point from October 19. Yields have eased, but this price report alone cannot establish whether buyers’ monthly payment burden has improved.

Impact

What to watch next

• The August S&P/Case-Shiller annual home-price reading on October 27 will offer a comparison with another index, though it covers an earlier month.
• September new-home sales on October 27 will test transaction demand alongside slower price growth; the estimate is a 660,000 annual sales pace, versus 684,000 previously.
• The MBA 30-year mortgage-rate release on October 28 will show whether financing costs have eased; the previous reading was 7.41%.