US home prices in the 20 largest cities rose 0.32% MoM in October (the latest data from S&P CoreLogic Case-Shiller), considerably hotter than the 0.22% rise expected. However, despite the MoM beat, the pace of annual acceleration has declined to its slowest since Sept 2023...

Source: Bloomberg

So 100bps of rate-cuts prompted a reacceleration in home prices...

...despite surging mortgage rates...

Arguably, (lagged) mortgage rates increased during that period, and dipped since (positive short-term for the highly smoothed and lagged Case Shiller series), but as is clear, things do not end well...

"Our National Index hit its 17th consecutive all-time high, and only two markets – Tampa and Cleveland – fell during the past month," Brian D. Luke, CFA, head of commodities, Real & Digital Assets, commented.

"The annual returns continue to post positive inflation-adjusted returns but are falling well short of the annualized gains experienced this decade."

However, home price appreciation does seem to track very closely with bank reserves at The Fed (6mo lag)...

Source: Bloomberg

Which suggests the pace of home price appreciation is set to slow further from here.

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