Home price growth in the U.S. is starting to decelerate.

Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 19.5% annual gain in September, down from 19.8% from August. The 20-City Composite posted a 19.1% annual gain, down from 19.6% a month earlier. The 20-City results came in lower than analysts’ expectations of a 19.3% annual gain, according to Bloomberg consensus estimates.

“If I had to choose only one word to describe September 2021’s housing price data, the word would be ‘deceleration,’” said Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “Housing prices continued to show remarkable strength in September, though the pace of price increases declined slightly.”

Phoenix continued to lead the 20-City Composite, posting a 33.1% annual gain followed by two cities in Florida — Tampa and Miami. Tampa posted a 27.7% year-over-year gain and Miami a 25.2% gain.

“We also saw very strong price growth at the city level. All 20 cities saw price increases in September, and all 20 cities stand at their all-time highs,” said Lazzara. “September’s price increase ranked in the top quintile of historical experience for all 20 cities, and in the top decile for 17 of them. That said, in 14 of 20 cities, prices decelerated — i.e., increased by less in September than in August.”

Price gains first showed signs of slowing down in August when the index started to level off.

“Nevertheless, home prices continue to post near 20% annual gains. However, the slowing of monthly price acceleration while home purchase activity remains strong suggests that the market is trending toward a healthier balance between buyers and sellers,” said CoreLogic Deputy Chief Economist Selma Hepp, in a statement prior to the results. “In the coming months, we are likely to see a continued slowing of monthly and annual home price gains while total 2021 home purchases will outpace last year’s purchases.”

More recent data from Realtor.com reveals that the rate of price increases will likely continue to slow down. Prices are beginning to cool in some markets, with Realtor.com’s data showing that 17 out of the top 50 largest cities experienced listing price declines in October, compared with last year, according to George Ratiu, Realtor.com manager of economic research.

Ratiu attributes this to more homeowners preparing to list their homes for sale in the next six months, alleviating the tight inventory that has been pushing prices up.

"As we approach the end of a tumultuous 2021, real estate markets continue to struggle with inventory, homes are selling quickly and prices continue to rise. However, the market has cooled since the beginning of the year, when dozens of competing bids, contingency waivers and price escalation clauses made home shopping a struggle, especially for first-time buyers... In addition, inflation and rising mortgage rates are squeezing many household budgets," Ratiu added in a statement prior to the Case-Shiller results. "For buyers, the landscape looks more promising as we head into 2022.”