The slowdown in the US real estate market continues

RockedBuzz
By RockedBuzz 3 Min Read

The S&P CoreLogic Case-Shiller National Home Price Index, one of the most important real estate market indicators in the United States, decreased by 0.2 percent in January compared to December, seasonally adjusted. Prices have already fallen for seven consecutive months, which means the longest decline since 2012, reported the WSJ.

In an annual comparison, the index rose by 3.8 percent in January, compared to the previous month’s annual rate of 5.6 percent. The annual increase was the smallest since December 2019.

The rise in mortgage rates over the past year limited home sales and slowed the rise in home prices. Interest rates rose above 7 percent in October and November, and have been fluctuating at this level ever since: the average interest rate for 30-year fixed mortgages was 6.42 percent in the week ending March 23, while the level was 4.42 percent a year earlier, according to Freddie According to Mac.

“Rising mortgage rates and growing affordability challenges have led to slower home price growth,” said Lisa Sturtevant, chief economist at Bright MLS.

Prices are falling fastest in western markets, such as Seattle, where they were down a seasonally adjusted 1.5% in January from the previous month, and Las Vegas, where prices fell 1.1%.

Nationally, Miami had the fastest annual home price growth at 13.8%, followed by Tampa at 10.5%. The weakest market was San Francisco, where prices fell 7.6% year over year.

The median price of existing homes fell 0.2% to $363,000 in February from a year earlier, the National Association of Realtors said.

The Case-Shiller 10-city index rose 2.5% in the year to January, compared with a 4.4% rise in December. The 20-city index rose 2.5%, following a 4.6% annual increase in December. Economists polled by the Wall Street Journal expected a 2.7% increase for the 20-city index.

The Case-Shiller index measures repeat sales data, the numbers are reported with a two-month lag, and the metric reflects a three-month moving average. Apartments are usually under contract a month or two before closing, so the January data are based on purchase decisions made at the beginning of this year or at the end of last year.

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Cover image: Getty Images.

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