a sign is posted in front of new homes for sale at hamilton cottages on september 24 2020 in novato california there are signs that price growth could be cooling off in the otherwise redhot housing market prices rose 198 year over year in august which was the same as the previous month according to the sp corelogic caseshiller indices that is the first time the annual gain hasnt increased since early 2020 the 10city composite annual increase was 186 down from 192 in july the 20city composite rose 197 yearoveryear down from 20 in the previous month prices in all cities covered are at an alltime high we have previously suggested that the strength in the us housing market is being driven in part by a reaction to the covid pandemic as potential buyers move from urban apartments to suburban homes said craig lazzara managing director and global head of index investment strategy at sp dji august data also suggest that the growth in housing prices while still very strong may be beginning to decelerate phoenix san diego and tampa saw the highest yearoveryear gains among the 20 cities in august phoenix led the way with a 333 yearoveryear price increase followed by san diego with a 262 increase and tampa with a 259 increase eight of the 20 cities reported higher price increases in the year ending august 2021 versus the year ending july 2021 price gains were partly fueled by a drop in mortgage rates in july and august the average rate on the popular 30year fixed loan fell below 3 in july and stayed there until midseptember it then began to rise sharply and is now around 325 according to mortgage news daily higher interest rates could take some of the heat out of home prices in the coming months home prices however are unlikely to cool significantly as both homebuyer demand and investor demand are still high the supply of homes for sale especially at the lower end of the market remains extremely lean some new supply did come on over the summer but it is falling yet again persistently strong demand among traditional homebuyers has been amplified by an increase in demand among investors this summer said selma hepp deputy chief economist at corelogic while strong home price appreciation rates are narrowing the pool of buyers particularly firsttime buyers the depth of the supply and demand imbalance and robust demand among higherincome earners will continue to push prices higher