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Home-Price Growth Slows Under Tide of Rising Mortgage Rates

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US home price growth slowed sharply in the third quarter, according to the National Association of Realtors.

The median selling price of existing single-family homes last quarter was up 8.6% year-over-year to $398,500, slowing from a 14.2% pace in the second quarter, according to the NAR.

The massive price increases that have characterized the housing boom of the past two years are becoming less widespread. In the third quarter he was 46% of the 185 metropolitan areas tracked by the NAR, with the median price up more than 10% above his. 80% of metropolitan areas in Q2.

Due to rising mortgage interest rates, Borrowing costs for future homebuyers rise It has forced many companies out of the market. Home sales fall for eighth straight month Until September.

House prices have fallen from their spring highs nationwide. In many markets, lower prices are typical in the fall and winter as homebuying activity is usually slower than in the spring and summer. However, some markets are now seeing prices drop every year.

According to the NAR, the largest metropolitan area in the third quarter compared to the same period last year was Cumberland, Maryland, where median prices fell 4.5%, followed by Bismarck, North Dakota, which fell 4.1%, followed by San Francisco. fell 3.7%. .

Still, prices in most areas are higher than they were a year ago due to limited supply. Third quarter median single-family sales prices were up in 181 of the 185 metropolitan areas compared to the same period last year.

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Many potential sellers choose Maintain the status quo rather than abandon current low mortgage ratesEconomists and realtors say they are keeping the number of homes on the market lower than usual.

NAR chief economist Lawrence Yun said, “Home price growth is slowing home price growth, and this trend will continue until mortgage rates stop rising.”

The NAR house price index, which takes into account family income, mortgage interest rates and existing single-family home sales prices, fell to its lowest level since June in September. June reading was the lowest in decades.

The average interest rate for a 30-year fixed-rate home loan was 6.95% in the week ending Nov. 3, according to mortgage lender.

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This is up from 3.09% in the previous year.

Since homes are typically contracted a month or two before closing, the third quarter pricing data is primarily from the second quarter or early third quarter when mortgage rates were lower than they are today. It reflects a purchase decision made on

Typical monthly mortgage payments for single-family homes were $1,840 in the third quarter, up from $1,226 a year earlier, according to the NAR.

Deterioration of housing affordability More households considering moving. Real estate brokerage

redfin

24.2% of shoppers on the platform said they searched for homes outside the metropolitan area in Q3, up from 23.3% in Q2 and about 18% before the pandemic.

Home sales numbers are likely to continue to decline as interest rates rise, said chief economist Skyler Olsen.

Giraud Group.

“I think trading volumes will drop significantly,” she said. “That said, the stock of homes on the market is still low, so prices may not fall dramatically at the national level,” she said.

Florida and the Sunbelt saw the biggest gains. According to the NAR, the Northport, Fla., metropolitan area recorded the biggest increase in the third quarter, with a median increase of 23.8% year-over-year. The next largest metropolitan area was Lakeland, Florida, with a 21.2% increase, and Myrtle Beach, South Carolina, with a 21.1% increase.

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He owns The Wall Street Journal and also operates Realtor.com under license from the NAR.

write destination Nicole Freedman [email protected]

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