US home prices climbed at a faster pace in August, marking the seventh consecutive month of increases as high mortgage rates kept buyers and sellers off the market.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index, covering all nine US census divisions, ticked up 2.6% annually in August, compared to a 1% year-over-year increase in July after seasonal adjustment.

The 10-City Composite ticked up 3% year over year in August from a 1% increase in July, while the 20-City Composite posted a 2.2% increase on a yearly basis, compared to 0.2% in the previous month.

On a monthly basis, the national index rose 0.9% in August after seasonal adjustment, compared to a 0.6% monthly increase in July.

Craig Lazzara, managing director at S&P Dow Jones Indices, said that on a year-to-date basis, the index has risen 5.8%, which is "well above the median full calendar year increase in more than 35 years of data."

"The year's increase in mortgage rates has surely suppressed housing demand, but after years of very low rates, it seems to have suppressed supply even more," Lazzara said in an Oct. 31 release.

Among the 20 cities in the index, Chicago logged the highest yearly gain in home prices for the fourth consecutive month at 5%, followed by New York with a 4.98% increase and Detroit at 4.8%.

The largest price declines were recorded in Las Vegas at -4.9% and Phoenix at -3.9%.

– Set email alerts for future Data Dispatch articles. – Read some of the day's top real estate news and insights from S&P Global Market Intelligence.

Existing home sales continue to decline in August

Existing home sales continued to decline in August, falling 15.4% year over year and 2% month over month to a seasonally adjusted annual rate of 3.96 million units, according to data from the National Association of Realtors.

"As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales," Lawrence Yun, chief economist at National Association of Realtors, said in an Oct. 19 release. "The Federal Reserve simply cannot keep raising interest rates in light of softening inflation and weakening job gains."

All regions logged a monthly decline in existing home sales except the Northeast, which posted a 4.2% increase in sales to a seasonally adjusted annual rate of 500,000 units. Sales declined 16.7% from the same period a year ago in the region.

The West had the highest yearly and monthly decline in existing home sales. Existing home sales dropped 19.3% year over year in the region.

"The West experienced softer price growth reflecting a pause after years of unsustainable and rapid price increases, especially in the Rocky Mountain region," Yun said.

In September, new home sales rose 12.3% above the revised August rate of 676,000 units to a seasonally adjusted annual rate of 759,000 units, according to data from the US Census Bureau and the Department of Housing and Urban Development. This reflected a 33.9% rise above the September 2022 estimate of 567,000 units.

The Northeast posted the highest monthly and yearly increase in new home sales in September at 22.5% and 63.3%, respectively.

Higher mortgage rates keep homebuilder stocks under pressure

After a brief increase in September, the median one-year total stock return of all US homebuilders declined sharply in October.

As of Oct. 30, the median one-year total stock return of homebuilders was 45.4%, down from an industry median of 74.3% as of Sept. 25 and 64.1% as of Aug. 29, according to S&P Global Market Intelligence data.

Higher mortgage rates are "finally having an effect" on homebuilder stocks as investor concerns rise over dwindling demand for houses due to lack of affordability, Financial Times reported Oct. 29.

Beazer Homes USA Inc. was the best-performing stock, with a one-year total return of 105.7%.

Top mortgage lenders

S&P Global Market Intelligence data showed $1.116 trillion of residential mortgage originations year to date through July, down 46.8% year over year.

Pontiac, Mich.-based UWM Holdings Corp. remained the top US residential mortgage lender with $44.02 billion in mortgages through July.

Eighteen of the top 20 residential mortgage lenders recorded a yearly decline in the residential mortgages originated year to date through July.