House prices in the US are slowing down

Annual price growth in the fragile United States (US) housing market fell to single digits in October for the first time in about two years, as mortgage rates that month rose above 7%, further stifling demand. , showed a couple of surveys.

The S&P National Home Price Index rose 9.2% in October, up from 10.7% in September and posted its first single-digit gain since November 2020.

For its part, the Federal Housing Finance Agency, which oversees mortgage lenders Fannie Mae and Freddie Mac, said annual home price growth slowed to 9.8% in October from 11.1% in September, which marks the first non-double-digit gain since September 2020.

On a monthly basis, the S&P Case Shiller Index fell for the fourth straight month, while the FHFA gauge was unchanged.

The housing market has suffered the most visible effects of the aggressive interest rate hikes by the Federal Reserve (Fed), which aim to curb high inflation by undermining demand in the economy.

This month, the Fed raised rates again by half a percentage point, capping a year in which its benchmark rate soared from near zero in March to a range of 4.25 to 4.5 percent.

Unlike other segments, many of which have yet to show a significant impact from Fed actions, the housing market reacts in near real time to rising borrowing costs.