Home Prices Kept Dropping In December

Home price appreciation continued to cool in December, with some markets seeing declining prices, according to new data.

The S&P CoreLogic Case-Shiller National Home Price NSA Index saw home prices decelerate, posting a 5.8% annual gain in December, down from 7.6% in the previous month.

Craig J. Lazzara, Managing Director at S&P DJI, said the data marked the sixth straight month of YOY decreases.

Southern cities continued to see gains, with Miami, Tampa, and Atlanta all recording 10%+ increases despite the cooldown in other metros. 

Pricey Western metros saw YOY prices fall, with San Francisco clocking in a 4.2% drop.

Month-over-month prices fell in all twenty cities analyzed, however, with a median decline of -1.1%.

“The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken,” Lazzara said.

According to the latest Federal Housing Finance Agency House Price Index, house prices were up 8.4% YOY, but down 0.1% from November.

“House price appreciation continued to wane in the fourth quarter” said Dr. Polkovnichenko, Supervisory Economist in FHFA’s Division of Research and Statistics. 

“House prices grew at a much slower pace in recent quarters amid higher mortgage rates and a decline in mortgage applications. These negative pressures were partially offset by historically low inventory.”

For the nine census divisions, the South Atlantic division recorded the strongest four-quarter appreciation at 12.4%, while the Pacific performed worst, with prices rising by only 2.3%.

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