Home News US home prices dropped for the fifth month in a row in November

US home prices dropped for the fifth month in a row in November

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US home prices fell for the fifth straight month in November, according to the latest S&P CoreLogic Case-Shiller US National Home Price Index. Rising mortgage rates forced homebuyers out of the housing market at the end of last year and prices continued to fall. Released on Tuesday.

Last July marked the first month-on-month decline in the national index since February 2012, which continued through November, when seasonally adjusted prices fell 0.3% month-on-month.

All cities in the 20 Cities Index reported pre-seasonally adjusted declines. Even after seasonal adjustment, 19 cities reported his decline, only Detroit where he increased by 0.1%.

“November 2022 marks the fifth straight month of declines in U.S. home prices,” said Craig J. Lazzara, Managing Director, S&P DJI. “Mortgage lending continues to be a headwind for home prices as the Federal Reserve raises interest rates.”

Compared to a year earlier, U.S. home prices edged up in November, but the pace of growth slowed from previous months.

The latest S&P CoreLogic Case-Shiller US National Home Price Index, released Tuesday, showed home prices rose 7.7% year-on-year in November, a smaller gain than the 9.2% gain seen in October. .

The southern city led price gains in Miami. Atlanta; and Tampa, Florida all reported the highest year-over-year growth of any city in the 20 Cities Index for November. Miami led the way with an 18.4% year-over-year price increase, followed by Tampa and Atlanta. Compared to the year ending October 2022, price increases for the year ending November 2022 decreased in all 20 of his cities.

Economic weakness, including a possible recession, could continue to deter potential buyers, Lazzara said.

“Given these prospects for a difficult macroeconomic environment, house prices may continue to fall,” he said.

Lisa Sturtevant, chief economist at Bright MLS, said the November report showed evidence of a slowdown in the housing market in the fall, but may not show the worst of the housing market. rice field.

“Home price data released today do not fully account for the impact of higher mortgage rates, which topped 7% in early November, causing a significant slowdown in homebuyer activity,” she said. “In many rural markets across the country, home prices have fallen sharply from their summer peaks as affordability issues drove buyers out of the market.”

But she said talk of a major market correction was just an exaggeration.

“The housing market may have bottomed out already,” she said.

Mortgage rates fell throughout January, prompting more buyers to view properties and make offers. Inflation is starting to ease and consumer confidence is rising. pending home sale improved in December, homebuilder confidence surged in January.

“Many agents and brokers are expecting a stronger spring housing market, and the overall mood in the market is much more optimistic than it was a month ago,” she said. rice field.

Affordable housing inventory remains a stubborn problem for many buyers. Many current homeowners are hesitant to sell if interest rates are very attractive below his 4%. Buying a new home comes with much higher interest rates.

“Homebuyers are still finding supply in the market to be limited, and affordability remains a major challenge, especially for first-time homebuyers,” said Sturtevant. “The persistent shortage of inventories exacerbated by this ‘rate lock’ is the main reason we expect prices to stabilize or even rise over the next year.”

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