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May 02, 2023

Home Prices Decline Once Again: What the Experts Are Saying

A three-month streak of lower home prices shows that the Federal Reserve's bid

A three-month streak of lower home prices shows that the Federal Reserve's bid to cool inflation is working.

Home prices declined for a third straight month in September amid a rapidly cooling housing market.

The longest streak of monthly declines in a decade comes courtesy of a surge in mortgage rates, which have been fostered by the Federal Reserve in order to halt inflationary pressures across the economy.

For the record, the S&P CoreLogic Case-Shiller National Home Price Index fell 1% in September from August. The index, which measures homes prices across the U.S., has lost 2.6% of its value over the past three months.

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Year-over-year, home prices rose 10.6% in September, boosted by low levels of housing inventory.

"As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be more expensive and housing becomes less affordable," Craig Lazzara, managing director at S&P Dow Jones Indices, said in a press release. "Given the continuing prospects for a challenging macroeconomic environment, home prices may well continue to weaken."

To get a sense of what the experts make of the latest reading on home prices, below please find select commentary from economists, strategists and other market pros, sometimes edited for brevity.

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Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.

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