US house price growth slows in August

US house price growth eased in August amid higher interest rates, according to the latest S&P CoreLogic Case-Shiller national home price index.

The index covering all nine US census divisions rose 13% on the year, down from 15.6%growth in July.

The 10-City composite index saw an annual increase of 12.1% in August, down from 4.9% a month earlier. Meanwhile, the 20-city composite index pushed up 13.1%, down from 16% in July.

Miami, Tampa, and Charlotte reported the highest year-over-year gains among the 20 cities. Miami led the way with a 28.6% increase, followed by Tampa with a 28% jump, and Charlotte with a 21.3% rise.

Craig J. Lazzara, managing director at S&P DJI, said the data shows clearly that the growth rate of housing prices peaked in the spring of 2022 and has been declining ever since.

"As the Federal Reserve moves interest rates higher, mortgage financing becomes more expensive and housing becomes less affordable. Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to decelerate," he added.

Nancy Vanden Houten, lead US economist at Oxford Economics, said: "We expect the decline in home price growth to accelerate as sharply higher mortgage rates deliver a major blow to affordability and home sales. We look for y/y home price growth to slip below 10% by Q4 and to be flat by mid-2023."