Home prices fell at a record pace in August, according to S&P Case-Shiller

Home for Sale by Owner, Forest Hills, Queens, New York.

Lindsey Nicholson | UGG | Universal Image Group | Getty Images

Home prices are still higher than they were a year ago, but gains are shrinking at the fastest pace on record, a key metric shows, as the housing market struggles under rising rates. significantly higher interest.

Prices in August were 13% higher nationally compared to August 2021, according to the S&P CoreLogic Case-Shiller Home Price Index. That’s down from a 15.6% year-on-year gain the previous month. The 2.6% difference in these monthly comparisons is the largest in the history of the index, which was launched in 1987, meaning price gains are slowing at a record pace.

The 10-city composite, which tracks the largest housing markets in the United States, rose 12.1% year-over-year in August, compared with a 14.9% gain in July. The 20-city composite, which includes a wider range of metropolitan areas, rose 13.1%, compared with a 16% increase the previous month.

“The sharp deceleration in U.S. home prices that we noted a month ago continued in our August 2022 report,” S&P DJI chief executive Craig Lazzara wrote in a statement. “Price growth has slowed in each of our 20 cities. This data clearly shows that the rate of house price growth peaked in the spring of 2022 and has been declining ever since.”

Miami, Tampa and Charlotte led the price increases in August, with year-over-year increases of 28.6%, 28% and 21.3%, respectively. All 20 cities reported lower price increases in the year ending August compared to the year ending July.

The West Coast, which includes some of the most expensive housing markets, saw the largest monthly declines, San Francisco (-4.3%), Seattle (-3.9%) and San Diego (-2.8 %) that fell the most.

A rapid jump in mortgage rates from record lows this year has put the once hot housing market on its heels. The average rate for the popular 30-year fixed-rate home loan started this year around 3%. In June, it stretched to over 6% and is now just over 7%, according to Mortgage News Daily.

“With monthly mortgage payments 75% higher than last year, 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. “said George Ratiu, senior economist at Realtor. .com.

He also noted that higher home prices combined with higher interest rates are preventing potential sellers from listing their homes. They seem to be locked into their lower rates.

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