Home Prices Decelerated In June
Home prices decelerated in June as buyers left the market, driven by historically high prices and rising interest rates.
Both the S&P CoreLogic Case-Shiller Indices and Federal Housing Finance Agency House Price Index (FHFA HPI) saw price growth moderate in June. The HPI saw prices rise only 0.1% from May, while Case-Shiller reported an 18% YOY gain in June, down from 19.9% in May.
FHFA’s data suggests prices are just now beginning to moderate. From Q1 2022 to Q2, prices rose 17.7% YOY and 4% quarter-over-quarter, with the only deceleration appearing in June.
“Housing prices grew quickly through most of the second quarter of 2022, but a deceleration has appeared in the June monthly data. The pace of growth has subsided recently, which is consistent with other recent housing data,” said William Doerner, Ph.D., Supervisory Economist in FHFA’s Division of Research and Statistics.
“It’s important to bear in mind that deceleration and decline are two entirely different things, and that prices are still rising at a robust clip. June’s growth rates for all three composites are at or above the 95th percentile of historical experience,” noted Craig J. Lazzara, Managing Director at S&P DJI.
“We’ve noted previously that mortgage financing has become more expensive as the Federal Reserve ratchets up interest rates, a process that continued as our June data were gathered. As the macroeconomic environment continues to be challenging, home prices may well continue to decelerate.”
Home prices appear to have peaked in a growing number of overpriced housing markets.
Many home sellers are dropping their asking prices, especially in pandemic boomtowns like Boise, as the market cools and buyers have gained ground to be picky. Almost 70% of Boise sellers cut their asking prices in July.
“We are at the turning point. The likelihood of significant price increases in the near future grows smaller by the day,” said Florida Atlantic University’s Ken H. Johnson.
Florida metros topped both indices’ lists for highest growth, with the state seeing an overall 29.8% increase, while Tampa and Maimi prices specifically rose 35% and 33%, respectively.
Prices continued strongest in the Southeast (+29.6%) and South (+29.3%).
Prices were weakest in the D.C. metro area, up only 9.1%.