Although home prices remain high compared to a year ago when there was a pandemic, they are starting to fall.

Home prices rose 19.5% in September year over year, down from a 19.8% annual gain in August, according to the S&P CoreLogic Case-Shiller national home price index. This is the first annual decrease since May 2020.

Composites of 10 cities rose 17.8% compared to a year earlier, despite an 18.6% increase in August. Composites from 20 cities gained 19.1% over the past year, compared to 19.6% during August.

The highest prices rose in Phoenix, Tampa and Miami. The Phoenix price rose by 33.1%, Tampa was up 27.7%, and Miami increased 25.2% year-over-year. Sixteen of 20 cities saw higher prices in September 2021 than the previous year.

The smallest price increases in annual terms were seen in Chicago, Minneapolis, and Washington D.C., however, they all exceeded 10%.

“If I had to choose only one word to describe September 2021’s housing price data, the word would be ‘deceleration,’ says Craig Lazzara, managing director at S&P Dow Jones Indices. “Housing prices maintained a remarkable level of strength during September, but the rate at which price rises decreased slightly.”

High prices are being held up by extremely limited inventory and high levels of investor activity in housing markets. Although the gains may be decreasing, prices are unlikely to drop as much as during the housing crisis. The market is still highly valued based on the fundamentals of supply-demand.

The market is cooling since last year’s beginning, when there were dozens of competing offers, price escalation clauses and contingency waivers making home buying difficult, particularly for first-time buyers. According to George Ratiu (manager of economic research at Realtor.com), a growing number of homeowners plan on listing within the next six-months, indicating an unusually active winter season.”

Prices are affected by rising mortgage rates. Mortgage News Daily reports that the average interest rate for a 30-year mortgage fell to 2.8% at the beginning of August. Then, it began increasing steadily. It was at 3.15 % as of September.