Mortgage

Annual price growth in the increasingly fragile U.S. housing market slid into the single digits in October for the first time in about two years when mortgage rates that month surged above 7% and further stifled demand, a pair of closely watched surveys showed on Tuesday, Reuters reported. The S&P CoreLogic Case Shiller national home price index increased by 9.2% in October, down from 10.7% in September and notching the first single-digit gain since November 2020. Meanwhile, the Federal Housing Finance Agency, which oversees U.S. mortgage-finance entities Fannie Mae and Freddie Mac, said annual home price growth slowed to 9.8% in October from 11.1% in September, marking that index's first non-double-digit gain since September 2020. On a month-over-month basis, S&P Case Shiller's index fell for a fourth straight month, while FHFA's gauge was unchanged. "As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be a headwind for home prices," Craig Lazzara, managing director at S&P DJI, said. The housing market has suffered the most visible effects of aggressive Fed interest rate hikes that are aimed at curbing high inflation by undercutting demand in the economy. This month, the Fed raised rates again by half a percentage point, capping a year that saw its benchmark rate shoot from near zero in March to between 4.25% and 4.5% now — the swiftest rates have risen since the early 1980s.