The S&P CoreLogic Case-Shiller Home Price Index indicates a seasonally adjusted 0.6% month-over-month increase in home prices in the 20 largest cities in October. Over the past 12 months, these cities have experienced a 4.9% increase in home prices.

The national home price index also rose by 0.6%, with a year-over-year growth of 4.8%. These data sets indicate a sustained upward trend in home prices.

Detroit saw the highest increase in home prices in October, rising by 8.1% year-over-year, followed by San Diego and New York. In contrast, Portland was the only city where home prices declined. A report from the Federal Housing Finance Agency also reveals a 0.3% month-over-month increase and a 6.3% year-over-year increase in home prices for October.

The main factor driving the increase in home prices is the shortage of supply. Despite mortgage interest rates reaching 8% in October, demand for home purchases remains robust, continuing to drive the rise in home prices.

Although rising interest rates have raised concerns, homeowners are reluctant to sell their homes at lower mortgage interest rates, leading to a continued shortage of existing homes. Historical data shows that resale homes make up nearly 90% of the market. The market may remain in a similar state until demand weakens or supply significantly improves.

Brian D. Luke of the S&P Dow Jones Industrial Average stated, "In October, U.S. home prices accelerated at the fastest annual growth rate this year. We are experiencing widespread appreciation of home prices nationwide, with 10 cities out of 19 showing stable increases." With the easing of mortgage interest rates and a slightly more accommodative stance from the Federal Reserve, homeowners may see further appreciation.

Looking ahead, Selma Hepp, Chief Economist at CoreLogic, expects that with the decline in mortgage interest rates, demand for home purchases may strengthen again in early 2024, putting pressure on home prices, similar to the trend observed in early 2023.

She adds that the annual appreciation rate of home prices is expected to accelerate this winter and then slow down again next year. However, during 2024, most markets are likely to continue setting new highs for home prices.