Experts expect the market to slow amid high mortgage rates
A record high for US home prices was recorded in August, continuing a streak of gains seen over the previous seven months. A national gauge of prices was up 0.9% in August compared to July, according to seasonally adjusted data from S&P CoreLogic Case-Shiller. New York, Boston, Miami and Atlanta were among the cities with all-time highs.
Tight inventory contributed to the increase in prices amid higher borrowing costs and owners becoming reluctant to list properties and give up lower interest rates.
“The year’s increase in mortgage rates has surely suppressed housing demand, but after years of very low rates, it seems to have suppressed supply even more,” said Craig Lazzara, managing director at S&P Dow Jones Indices, in a statement.
Home prices rose by 5.8% year-to-date, which is well above the median full-year increase in more than three decades of data, with a smaller number of properties put up for sale. At national level, prices were up 2.6% year over year.
New data from Redfin Corp indicates the crunch in inventory has eased as new listings are up by 0.3% from a year earlier in the four weeks through Oct 22. This is the first increase recorded since July 2022.
CoreLogic, however, anticipates a slowdown in monthly gains as climbing mortgage rates leave buyers reluctant. Mortgage rates have further increased since August, with some rates reaching almost 8% for a 30-year, fixed loan.
“Higher mortgage rates and seasonal trends will slow further monthly gains – with some possible declines in winter months,” said Selma Hepp, chief economist at CoreLogic Inc.
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