The prices of homes in the United States have continued to increase in September, even as mortgage rates soared to 8%, according to a report.
The S&P CoreLogic Case-Shiller National Home Price Index increased 0.7% in September from August on a seasonally adjusted basis, marking the eighth consecutive month of increases. The prices were also up 3.9% in September compared with the same month in 2022, per data released by S&P CoreLogic Case-Shiller on Tuesday.
The increase came even as mortgage rates soared to 8% in September. Craig J. Lazzara, managing director at S&P DJI, believes the increase in home prices is caused by the low inventory in the housing market.
"We've commented before on the breadth of the housing market's strength, which continued to be impressive. Although this year's increase in mortgage rates has surely suppressed the quantity of homes sold, the relative shortage of inventory for sale has been a solid support for prices," Lazzara said in a press statement.
"Unless higher rates or exogenous events lead to general economic weakness, the breadth and strength of this month's report are consistent with an optimistic view of future results," he added.
Where Did Home Prices Increase Most?
While home prices increased nationwide, prices hit all-time highs in Atlanta, Boston; Charlotte, North Carolina; Chicago; Cleveland; Detroit; Miami; New York and Tampa, Florida.
Home prices in September grew the most in Detroit where prices went up 6.7%. Following Detroit were San Diego, up 6.5%; and New York, up 6.3%.
In contrast, home prices fell in several cities, including a 1.9% drop in Las Vegas, 1.2% in Phoenix, and 0.7% in Oregon.
Did Rent Prices Increase?
Despite increasing home prices, rents are easing up, with the national median rent falling by 0.9% in November from October. Having said that, rent prices are still nearly $250 higher than it was three years ago, according to CNBC, citing data from the Apartment List.
Rent growth is expected to rise in the spring of 2024 but may be moderated by more supply. The apartment vacancy rate, which is currently at 6.4%, is also expected to rise even more next year.
READ NEXT: New Home Sales in October Dropped Lower Than Experts Predicted: Report