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Housing prices cooled at the fastest pace in the entire history of the index

A For Sale sign hangs over a single-family home on September 22, 2022 in Los Angeles, California.

Dinner Alison | Getty Images

U.S. home prices fell at the fastest pace in the history of the S&P CoreLogic Case-Shiller index in July, according to a new report released Tuesday.

Home prices in July were still higher than a year ago, but were down significantly from June’s gains. According to the report, prices in the country rose by 15.8% in July 2021, well below the 18.1% increase in the previous month.

The 10-city composite rose 14.9% year-over-year, up from 17.4% in June. The 20-city composite was up 16.1% from 18.7% in the previous month. In each of the cities covered by the index, the year-over-year growth in July was smaller than in June.

“The July report reflects a strong slowdown,” Craig J. wrote in a release. Lazaro, managing director of S&P DJI, noting the difference in annual growth between June and July. “The -2.3% difference between these two monthly growth rates is the largest slowdown in the index’s history.”

Tampa, Miami and Dallas posted the biggest year-over-year gains among the 20 cities in July, with increases of 31.8%, 31.7% and 24.7%, respectively. Washington, D.C., Minneapolis and San Francisco posted the smallest increases, but were still well above last year’s levels.

Another report from the National Association of Realtors showed that home prices fell sharply from June to July. Prices typically fall at this time due to the strong seasonality of the housing market, but the drop was three times the average drop over the past period.

The share of homes with reduced prices in August reached about 20%, the same as in 2017, according to Realtor.com.

“For homeowners planning to list, today’s market is significantly different than it was even 3 weeks ago,” said George Ratiu, senior economist and manager of economic research at Realtor.com.

Home prices are falling because affordability has weakened sharply due to rapidly rising mortgage rates. The average rate on the popular 30-year fixed mortgage started this year around 3%, but briefly topped 6% by June. It remained in the high 5% range throughout July and is now nearing 7%, making the average monthly payment about 70% higher than it was a year ago.

“As the Federal Reserve continues to raise interest rates, mortgage financing has become more expensive, a process that continues to this day. Given the outlook for a more challenging macroeconomic environment, housing prices may well continue to decelerate,” Lazaro said.

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Housing prices cooled at the fastest pace in the entire history of the index

A For Sale sign hangs over a single-family home on September 22, 2022 in Los Angeles, California.

Dinner Alison | Getty Images

U.S. home prices fell at the fastest pace in the history of the S&P CoreLogic Case-Shiller index in July, according to a new report released Tuesday.

Home prices in July were still higher than a year ago, but were down significantly from June’s gains. According to the report, prices in the country rose by 15.8% in July 2021, well below the 18.1% increase in the previous month.

The 10-city composite rose 14.9% year-over-year, up from 17.4% in June. The 20-city composite was up 16.1% from 18.7% in the previous month. In each of the cities covered by the index, the year-over-year growth in July was smaller than in June.

“The July report reflects a strong slowdown,” Craig J. wrote in a release. Lazaro, managing director of S&P DJI, noting the difference in annual growth between June and July. “The -2.3% difference between these two monthly growth rates is the largest slowdown in the index’s history.”

Tampa, Miami and Dallas posted the biggest year-over-year gains among the 20 cities in July, with increases of 31.8%, 31.7% and 24.7%, respectively. Washington, D.C., Minneapolis and San Francisco posted the smallest increases, but were still well above last year’s levels.

Another report from the National Association of Realtors showed that home prices fell sharply from June to July. Prices typically fall at this time due to the strong seasonality of the housing market, but the drop was three times the average drop over the past period.

The share of homes with reduced prices in August reached about 20%, the same as in 2017, according to Realtor.com.

“For homeowners planning to list, today’s market is significantly different than it was even 3 weeks ago,” said George Ratiu, senior economist and manager of economic research at Realtor.com.

Home prices are falling because affordability has weakened sharply due to rapidly rising mortgage rates. The average rate on the popular 30-year fixed mortgage started this year around 3%, but briefly topped 6% by June. It remained in the high 5% range throughout July and is now nearing 7%, making the average monthly payment about 70% higher than it was a year ago.

“As the Federal Reserve continues to raise interest rates, mortgage financing has become more expensive, a process that continues to this day. Given the outlook for a more challenging macroeconomic environment, housing prices may well continue to decelerate,” Lazaro said.

Reported by Source link

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Most Popular