Higher mortgage rates are pushing more buyers to the sidelines as home prices fall.
It was the first year-over-year reading in 21 months when the prices in November were still 8.6% higher than in the previous year. Since November 2020, the rate of appreciation has fallen.
The prices are 2.5% below the peak and are expected to go down this year. The price movement will fall into negative territory by the spring before bouncing back to growth in the fall.
Although home price growth has been slowing rapidly and will continue to do so in 2023, strong gains in the first half of last year suggest that total 2022. Consumers are still wary of both the housing market and the overall economic outlook, which will present its own challenges.
After a brief respite in November and December, mortgage rates are back on the rise. Over the summer, the average rate on a 30-year fixed loan was more than seven percent. It reached a high at the end of October. It fell back, hitting a low of 6.13% in mid-December, but is now up over 6.5%.
Potential buyers are grappling with the idea of buying amid the possibility of further price declines and a continued inventory shortage. With slowly improving affordability and a more optimistic economic outlook, the housing market could show resilience in the years to come.
Home prices in Florida, South Carolina and Georgia increased the most in the nation. Washington, D.C., was the last place with prices up.
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