October home prices record biggest gain of 2023

A “For Sale Pending” sign is placed in front of a home for sale in San Anselmo, California on November 30, 2023. Pending home sales fell 1.5 percent in October to a 20-year low, according to a report by the National Association of Realtors. (Photo by Justin Sullivan/Getty Images)

Justin Sullivan | Getty Images News | Good pictures

Nationally, home prices rose 4.8% in October compared to October 2022, according to the S&P CoreLogic Case-Shiller Home Price Index. This is an improvement from the 4% annual increase in September and represents the strongest annual gain seen in 2023.

The 10-city composite rose 5.7% from a 4.8% increase in the previous month. The 20-city composite rose 4.9% from a 3.9% advance in September.

The strength in home prices came despite a sharp rise in mortgage interest rates in October. According to Mortgage News Daily, the average rate on a 30-year fixed loan topped 8% on Oct. 19. This is the highest level in more than two decades. However, rates fell steadily through November before falling more sharply in December, with the 30-year fixed rate now at 6.7%.

“Home prices have continued to rise, leaning toward the highest mortgage rates on record this market cycle,” Brian Luke, S&P DJI's head of commodities, real & digital assets, said in a release. “With mortgage rates easing and the Federal Reserve guiding toward a slightly more accommodative stance, homeowners may be poised to see more appreciation.”

Among the top 20 cities, Detroit posted the largest year-over-year price gain in October, at 8.1%. San Diego followed with a 7.2% rise and then New York with a 7.1% gain. Home prices fell 0.6% in Portland, Oregon, the only city to show lower prices in October than a year ago.

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“Home price gains in the CoreLogic S&P Gas-Shiller index are up 7% year-to-date and 1% above the 2022 peak, reversing all losses recorded in the second half of 2022,” said Selma Hebb. , Chief Economist at CoreLogic. “Given the strong seasonal gains seen in early 2023, annual home price growth should accelerate this winter before slowing again next year.”

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