Home prices jumped by the most in almost a year in November, this closely watched barometer says

A "for sale" sign is posted in front of a home in Sacramento, Calif., March 3, 2022. A closely watched housing market barometer shows U.S. home prices in November, 2023, posted their biggest annual gain in more than a year. S&P Dow Jones Indices’ CoreLogic Case-Shiller national home price index rose 5.1% over the 12 months ended in November. (AP Photo/Rich Pedroncelli, File)

LOS ANGELES (AP) — A closely watched housing market barometer shows U.S. home prices in November posted their biggest annual gain in more than a year.

S&P Dow Jones Indices’ CoreLogic Case-Shiller national home price index rose 5.1% over the 12 months ended in November. That’s the index’s fifth straight annual gain and the biggest since December 2022, according to data released this week.

The jump "is pretty strong, given where mortgage rates have been and the impact on affordability,” said Selma Hepp, chief economist at CoreLogic.

U.S. home prices are now up 45% since March 2020, the early days of the pandemic.

A tight supply of homes for sale nationally has kept upward pressure on home prices despite a severe housing market slump deepened by a sharp runup in mortgage rates last fall.

The average rate on a 30-year mortgage rate reached 7.79% in late October, according to mortgage buyer Freddie Mac. Since then, home loan borrowing costs have been mostly easing, though they remain well above the rock-bottom levels seen just three years ago.

Elevated mortgage rates and a dearth of available homes have kept the U.S. housing market mired in a slump the past two years. Sales of previously occupied U.S. homes sank to a nearly 30-year low last year, tumbling 18.7% from 2022.

While annual home price gains remain solid, the month-to-month changes in the latest index paint a less definitive picture of home price trends.

Consider, the November reading was down 0.2% from October, marking the first monthly decline in the home price index since January 2023.

“Surging mortgage rates in late 2023 started to impact prices in November, which declined from the month before,” Hepp said. “That suggests pivoting of annual gains over the next few months.”

CoreLogic forecasts that U.S. home prices will rise by an average of 3% this year.

A version of the index that tracks the value of homes in 20 major U.S. metropolitan areas showed that home prices in November increased in all but one of the metros in the index: Portland, Oregon.

Among the biggest gainers: Detroit, where the index surged to an annual gain of 8.2%, and San Diego, where the index registered an 8% annual gain.

Many economists are projecting that mortgage rates will head lower in 2024, though forecasts generally have the average rate on a 30-year home loan hovering around 6% by the end of the year.