US Annual Home Price Growth Accelerates in September

According to Yahoo News, U.S. annual home price growth accelerated again in September, highlighting the housing market's rebound as it entered the final quarter of the year. Home prices increased by 6.1% on a year-over-year basis in September, up from an upwardly revised 5.8% increase in the previous month, according to the Federal Housing Finance Agency (FHFA). On a quarterly basis, annual house prices rose 5.5% between the third quarter of last year and the same period this year. Home prices increased by 2.1% in the third quarter compared to the second quarter of this year, reflecting the reacceleration since June following a period of market softness. The report also showed that prices rose moderately on a month-over-month basis, in line with recent trends. Prices were up 0.6% in September, compared with an upwardly revised 0.7% month-over-month increase in August. The cost of mortgage loans fell last week to a two-month low after reaching almost 8% in October, the highest level in over 20 years. Despite the dip, housing inventory remains low, which has maintained a floor under prices paid for properties. The Federal Reserve kept its benchmark overnight lending rate unchanged earlier this month after raising its policy rate from the near-zero level in March 2022 to the 5.25%-5.50% range in July 2023. Investors do not expect another rate increase and are currently forecasting a rate cut in May of next year, given the Fed has indicated it would raise interest rates again only if progress in controlling inflation faltered.