House for Sale by Owner, Forest Hills, Queens, Latest York.
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Home prices are still higher than they were a yr ago, but gains are shrinking on the fastest pace on record, in response to one key metric, because the housing market struggles under sharply higher rates of interest.
Prices in August were 13% higher nationally compared with August 2021, in response to the S&P CoreLogic Case-Shiller Home Price Index. That’s down from a 15.6% annual gain within the previous month. The two.6% difference in those monthly comparisons is the biggest within the history of the index, which was launched in 1987, meaning price gains are decelerating at a record pace.
The ten-city composite, which tracks the most important housing markets in the USA, rose 12.1% yr over yr in August, versus a 14.9% gain in July. The 20-city composite, which incorporates a broader array of metropolitan areas, was up 13.1%, compared with a 16% increase the prior month.
“The forceful deceleration in U.S. housing prices that we noted a month ago continued in our report for August 2022,” wrote Craig Lazzara, managing director at S&P DJI, in a release. “Price gains decelerated in every one in every of our 20 cities. These data show clearly that the expansion rate of housing prices peaked within the spring of 2022 and has been declining ever since.”
Leading the value gains in August were Miami, Tampa, Florida, and Charlotte, North Carolina, with year-over-year increases of 28.6%, 28% and 21.3%, respectively. All 20 cities reported lower cost rises within the yr resulted in August versus the yr resulted in July.
The West Coast, which incorporates a number of the costliest housing markets, saw the biggest monthly declines, with San Francisco (-4.3%), Seattle (-3.9%) and San Diego (-2.8%) falling probably the most.
A fast jump in mortgage rates from record lows this yr has turned the once red-hot housing market on its heels. The typical rate on the favored 30-year fixed home loan began this yr right around 3%. By June it stretched over 6% and is now just greater than 7%, in response to Mortgage News Each day.
“With monthly mortgage payments 75% higher than last yr, many first-time buyers are locked-out of housing markets, unable to seek out homes with budgets which have lost $100,000 in purchasing power this yr,” said George Ratiu, senior economist at Realtor.com.
He also noted that higher home prices combined with higher rates of interest are keeping would-be sellers from listing their houses. They look like locked in to their lower rates.
