With mortgage rates re-accelerating, the housing market faces another (worsening) affordability crisis - all since The Fed cut rates - and just to add some more pain to that, S&P CoreLogic's Case Shiller data for August (released today) shows home prices in the top 20 cities in America rising 0.35% MoM (hotter than the 0.20% expected). However, despite the beat, home prices rose just 5.2% YoY (down from 5.93% in July) and the fifth straight monthly slowdown in the YoY growth...

Source: Bloomberg

That is the lowest YoY growth since September 2023... but we note that home prices remain near record highs...

Source: Bloomberg

The pace of home price appreciation continues to track bank reserves at The Fed (lower on a lag)...

Source: Bloomberg

Of course, the funniest thing is that as price appreciation actually begins to slow (a good thing for affordability at the margin), The Fed has slashed interest-rates (which one would expect will juice home prices once again?).

But despitye the initial drop in mortgage rates, they have soared recently back above 7.00%...

Source: Bloomberg

Will The Fed ignite another houosing bubble and re-heat CPI in an Arthur-Burns-esque 1970s redux?