Home prices are still higher than they were a year ago, but gains are decreasing at the fastest pace on record, as the housing market struggles under sharply higher interest rates.
The S&P CoreLogic Case-Shiller Home Price Index shows that prices in August were higher than in the previous year. The annual gain was down from the previous month. The biggest difference in the history of the index is the 2.6% difference in the monthly comparisons.
The 10-city index rose 12.1% in August compared to 14.9% in July. The 20-city index was up 13.1%, compared with a 16% increase in the previous month.
In a release, Craig Lazzara, Managing Director at S&P DJI stated that the deceleration in U.S. housing prices continued in their report for August 2022, In our 20 cities, the price gains slowed. The data shows that the growth of housing prices peaked in the spring of 2022.
Miami, Tampa and Charlotte had year-over-year increases of 28.6%, 22% and 21.3%, respectively. The year ending in August had lower price increases than the year ending in July.
The West Coast, which includes some of the costliest housing markets, saw the biggest monthly declines.
The once red-hot housing market has been overtaken by a jump in mortgage rates. The 30-year fixed home loan has an average rate of 3%. According to Mortgage News Daily, it was over 4% by June.
George Ratiu said that many first-time buyers are locked out of housing markets, unable to find homes with budgets that have lost $100,000 in purchasing power this year.
Higher home prices and higher interest rates are keeping would-be sellers from listing their homes. They seem to be locked in to their low rates.
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